Since 1960, the Ratio of Checking Deposits to GDP in the United

question 41

Multiple Choice

Since 1960, the ratio of checking deposits to GDP in the United States has

• A) risen sharply, indicating a strong positive correlation between the demand for checking deposits and the real interest rate.
• B) held remarkably constant, indicating no correlation between the demand for checking deposits and the real interest rate.
• C) fallen steadily, indicating, a positive correlation between the demand for checking deposits and the real interest rate.
• D) fallen steadily, indicating, because interest rates were stable over the period, no information about the correlation between the demand for checking deposits and the real interest rate.
• E) none of the above.

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Definitions:

Good

An item or product that can be used to satisfy a want or need.

Tax Revenue

The income that a government receives from taxes imposed on individuals and businesses.

Tax

Mandatory financial charge imposed by a government on individuals, corporations, or transactions to fund public expenditures.

Demand Curve

A visual depiction showing how the demand for a product varies with its price, usually illustrated with a line that slopes downwards towards the right.