How does the liquidity approach to measuring the money supply differ from the transaction approach?
What will be an ideal response?
The liquidity approach focuses on assets that can be converted into money quickly and without loss of nominal value while the transaction approach only looks at assets that are used as a medium of exchange. People can earn some interest with these assets and still convert them to money easily and cheaply.
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In 2008, Australia had a government budget surplus of $21.7 billion. This budget surplus shifts the demand for loanable funds curve ________
A) leftward and lowers the real interest rate. B) leftward and creates a crowding-out effect. C) rightward and creates a crowding-out effect. D) rightward and creates a Ricardo-Barro effect.
Dating the start of falling labor productivity growth in 1973 is very suggestive of this explanation for it: ________ energy prices and ________ use of energy per worker
A) higher, decreased B) higher, increased C) lower, decreased D) lower, increased