A major point of the Baumol-Tobin model of the transactions demand for money is that they show that the
A) demand for money is related to income.
B) velocity of money is constant.
C) fraction of income that people wish to hold in the form of money is constant.
D) interest sensitivity of the demand for money is based on a transactions motive shared by most people.
D
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Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat
Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently? A) 30,000 bushels of each B) 15,000 bushels of beans and 10,000 bushels of wheat C) 25,000 bushels of beans and 25,000 bushels of wheat D) 20,000 bushels of beans and 40,000 bushels of wheat
When the federal government is running a budget deficit:
a. government tax revenues exceed government expenditures. b. government expenditures exceed government tax revenues. c. the economy must be in an economic recession. d. the size of the national debt will decline.