Households and businesses often hold some of their wealth as non-interest earning money balances because O a. Money balances always pay lower rates of return than the non-money assets O b. The opportunity cost of holding money balances is lower than that of other assets Money balances provide convenience and lower risk than many other assets O C. O d. Money balances offer a better protection against rising prices than do many other assets

Households and businesses often hold some of their wealth as non-interest earning money balances because O a. Money balances always pay lower rates of return than the non-money assets O b. The opportunity cost of holding money balances is lower than that of other assets Money balances provide convenience and lower risk than many other assets O C. O d. Money balances offer a better protection against rising prices than do many other assets

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The $5-bill in your pocket (Canadian) is: (check all that apply) Select all that apply: O a. A liability for you O b. An asset for the Bank of Canada O C. A liability for the Bank of Canada O d. An asset for no one O e. A liability for no one Of. An asset for you
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18. Which function of money is it
Increasing non-borrowed reserves by buying bonds in OMO causes what effect in the demand and supply of reserves? O demand to shift to the right O supply to shift to the right demand to shift to the left O supply to shift to the left
When a bank suffers deposit outflows and has no excess reserves, the bank will generally first try to raise the funds by O A. calling in some loans. B. borrowing from the Fed. C. selling some of its securities. D. selling some loans. Suppose that a bank has $80 in checkable deposits, reserves of $15, and a reserve requirement of 10%. Also assume that the the bank suffers a $10 deposit outflow. If the bank chooses to borrow from the Fed to meet its reserve requirement, then the bank would need to borrow $. (Round your response to the nearest two decimal place.)
Robert needs to decide between buying a slate pool table for $1,800 or being able to go on a Canadian vacation for $1,000 and still having enough left over to buy a nonslate pool table for $800. Robert opts for the nonslate pool table and the Canadian vacation. Robert has used money in what ways in making his decision? O A. Medium of exchange and a standard unit of account. O B. Store of value and a standard unit of account. OC. Medium of exchange and a method to decrease deferred payments. O D. Medium of exchange and a store of value.
If Canadian Tire issues its own "money" and it becomes generally accepted by people in paying for goods and services at other stores, then we would consider it to 84 be ca htt O A. legal money because Canadian Tire is a Canadian incorporated company. O B. a form of fiat money. O C. Mlegal money because the government has not issued it O D. a form of fiduciary money As hav
Suppose there is an upswing in the economy with a large demand for finance to invest by the residential and non-residential building sector such that lending by all banks increases by $250 billion. On the assumption the reserve (or liquidity) ratio of banks is 12% this expansion in economic activity will result in an endogenous increase of O $20 billion of reserves and $230 billion of bank deposit money O $34.1 billion of reserves and $284.1 billion of bank deposit money O $20 billion of reserves and $270 billion of bank deposit money O $26.2 billion of reserves and $276.2 billion of bank deposit money
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