In the General Model of the Demand for Money, the Demand

question 146

Multiple Choice

In the general model of the demand for money, the demand for real balances is based on which of the following two variables?

• A) the supply of money and the price level
• B) the demand for assets and the supply of assets
• C) the level of real income and the nominal rate of interest
• D) expectations of inflation and money velocity

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Definitions:

Federal Government Budget Surplus

Occurs when a government's income exceeds its spending during a fiscal year.

Aggregate Demand

The aggregate need for products and services throughout an economy, specified at a consistent price level and during a certain time.

National Saving

The total saving in an economy, consisting of both private savings by households and businesses, and public savings by the government.

Formal Budget Process

The systematic procedures followed by organizations or governments to estimate revenues, plan expenditures, and manage finances.