The precautionary motive for holding money reflects the behavior of people who hold money
a. instead of near money
b. to transact purchases they expect to make
c. as insurance against unexpected needs
d. to speculate in the stock market
e. to take advantage of anticipated or hoped for changes in interest rates
C
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Which of the following statements is true?
A) Technological innovation can cause wages to fall for some workers. B) Technological innovation increases wages for all workers in an economy. C) Technological innovation always leads to unemployment in the economy as a whole. D) Technological innovation reduces the demand for goods and services in an economy.
When unions or legislation makes it necessary for a firm to pay higher wages,
A) efficiency declines. B) income is transferred from wealthy people to poor people. C) the marginal value of retained employees falls. D) the marginal value of retained employees rises. E) total purchasing power increases.