The Demand for Real Money Balances Is Generally Assumed To

question 37

Multiple Choice

The demand for real money balances is generally assumed to:

• A)be exogenous.
• B)be constant.
• C)increase as real income increases.
• D)decrease as real income increases.

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Definitions:

Payable

Short-term financial obligations or debts of a company, typically to suppliers, that are due to be paid within one year.

Cash Dividend

A payment made by a company out of its profits to shareholders, usually in the form of cash.

Dividends Payable

A liability on a company's balance sheet representing the amount of declared dividends that are owed to shareholders but not yet paid.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends.