The behavior of the M1 velocity of money in recent years can be explained by:
a. stability of interest rates
b. a low and stable rate of inflation.
c. monetary policy that has been successful in stabilizing the economy.
d. financial innovation creating new substitutes for M1 money.
e. a large number of banks and savings and loan associations going bankrupt.
d
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Suppose the demand for Pepsi-Cola is qp = 54 – 2pp + 1pc. The demand for Coca-Cola is qc = 54 - 2pc + 1pp. Each firm faces a constant marginal cost of zero. Determine the Bertrand equilibrium prices
What happens to the Bertrand equilibrium prices and profits if increased differentiation causes the demand for Pepsi-Cola to become qp = 104 - 2pp + 1pc while the demand for Coca-Cola remains unchanged?
In terms of utility theory, "equilibrium" in the real world means that
a. households are consuming as much of every commodity as they would like b. households have spent their incomes in such a way that their overall satisfaction is maximized c. households have spent their incomes in such a way that their marginal utility is maximized d. households have spent their incomes in such a way that their marginal utility is zero for every product consumed e. households have spent their incomes in such a way that their total utility is zero