The Demand for Money (M2) Remained Relatively Stable from the 1960s

question 6

Multiple Choice

The demand for money (M2) remained relatively stable from the 1960s through the early 1990s since, over this time period,

• A)the income elasticity of demand for M2 was close to 0
• B)yields on M2 assets rose more than proportionally with interest rates on money market instruments
• C)the opportunity cost of holding M2 assets changed very little
• D)the money demand function for M1 was also very stable
• E)all of the above

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Definitions:

Compensatory Damages

Money awarded to a plaintiff as reimbursement for her or his losses; based on the amount of actual damage or harm to property, lost wages or profits, pain and suffering, medical expenses, disability, and so on.

Disparate-Treatment Discrimination

A form of discrimination where an individual is treated less favorably than others based on a protected characteristic.

Title VII

A segment of the 1964 Civil Rights Act that bars discrimination in the workplace on the grounds of race, skin color, faith, gender, or national background.

Civil Rights Act of 1964

A landmark piece of federal legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin.