Jim Has the Following Assets and Liabilities Which of the Following Actions Would Increase Jim's Money Demand

question 98

Multiple Choice

Jim has the following assets and liabilities: $\begin{array}{l|r|}\hline \text { Credit card balance } & \$ 1,000 \\\hline \text { Cash } & \$ 200 \\\hline \text { Government bonds } & \$ 3,000 \\\hline \text { Checking } & \$ 300 \\\hline \text { Car loan balance } & \$ 10,000 \\\hline \text { Car } & \$ 15,000 \\\hline\end{array}$
 
Which of the following actions would increase Jim's money demand by $200?

• A)Jim writes a check for $200 to pay down his credit card balance.
• B)Jim writes a check for $200 to pay down her car loan balance.
• C)Jim pays $200 cash for a new lamp.
• D)Jim gets a $200 cash advance on his credit card and puts the proceeds in his checking account.

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Definitions:

Downward Sloping

Describes a curve or line on a graph that shows a decrease in one variable as another variable increases, typical of demand curves in economics.

Aluminum Cans

Containers made from aluminum used for packaging beverages and food items.

Long-run Average Total Cost

A metric reflecting the per-unit cost of producing a certain output level, considering all variable and fixed costs over time.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.