In deciding how much money to hold, individuals
A) must understand the velocity of the money and its role in the economy.
B) compare the inflation rate with the market interest rate.
C) base their decisions on what others are doing.
D) evaluate the relative costs and benefits of holding money versus other assets.
Ans: D) evaluate the relative costs and benefits of holding money versus other assets.
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Which of the following is not part of GDP?
A. purchases of new goods by households B. firms buying new machines C. the government buying new schools D. businesses paying bribes to government officials
Every economy must answer each of the following questions except one. Which is the exception?
a. Which goods will be produced? b. Why are these particular goods produced? c. Which resources should be used? d. How should resources be combined to produce each product? e. Who will actually consume the goods produced?