You graduate from law school and can now begin charging clients fees for your time. What impact will this have on your demand for money?
A. Your increased income will likely cause your demand for money to increase
B. Your opportunity cost of making trips to the bank will decrease
C. Your demand for money will not be affected
D. Your increased income will likely cause your demand for money to decrease
Answer: A
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Suppose that your tuition to attend college is $24,000 per year and you spend $8,000 per year on room and board. If you were working full time, you could earn $30,000 per year. What is your opportunity cost of attending college for one year?
A) $32,000 B) $38,000 C) $54,000 D) $62,000
The quantity theory of money is a proposition about
A) the nominal interest rate and the quantity of money demanded. B) the Fed's methods used to change the quantity of money. C) nominal and real interest rates. D) the relationship between financial assets and currency demanded. E) the relationship between a change in the quantity of money and the price level.