Allowing Checking Deposits to Earn Interest Should Not Make the LM

question 7

Multiple Choice

Allowing checking deposits to earn interest should not make the LM curve vertical because

• A) the demand for checking deposits remains insensitive to changes in the interest rate.
• B) the demand for currency remains sensitive to changes in the interest rate.
• C) the rates paid to checking deposits usually move up when the returns paid to other assets moved down and vice versa.
• D) banks do not immediately pay interest on checking accounts and depositors' reacting to the expectation of future earnings on checking deposits neutralize any potential stimulus.
• E) none of the above.

Recognize the structure and function of the limbic system in emotion and memory.

Identify the locations and roles of basal nuclei and understand their significance in health and disease.

Describe the structure and function of the brain's protective coverings and spaces.

Understand the functional significance of different cerebral cortex fibers.

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