An Individual Who Decides to Hold Money Instead of Other

question 286

Multiple Choice

An individual who decides to hold money instead of other assets:

• A) is giving up the interest that other assets could have earned.
• B) is likely to be subject to money illusion.
• C) is not affected by unanticipated inflation.
• D) can maintain a higher standard of living.

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Definitions:

Syndicate

A group of individuals or firms that join together to finance a project; also called an investment group.

Corporation

A legal entity that is separate from its owners, offering limited liability to its shareholders, and able to own property, enter contracts, and sue or be sued.

Partnership

A legal arrangement where two or more individuals share ownership of a business, including its liabilities and profits.

Cooperative

An association, which may or may not be incorporated, that is organized to provide an economic service to its members. Unincorporated cooperatives are often treated like partnerships for tax and other legal purposes.