Which of the Following Would Increase Prices for U

question 41

Multiple Choice

Which of the following would increase prices for U.S.consumers?

• A)a tariff on imported automobiles
• B)an automobile import quota
• C)a foreign government subsidizing auto production
• D)all of the above
• E)A and B above only

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Definitions:

Transaction Motive

The need to hold cash to satisfy normal disbursement and collection activities associated with a firm’s ongoing operations.

Liquidity

Measures the ease with which an asset can be converted into cash without significantly affecting its price.

Speculative Motive

The need to hold cash to take advantage of additional investment opportunities, such as bargain purchases.

Liquidity

The ability of an asset to be converted into cash quickly and without any significant loss in value.