Question : 31) If a person holding money for the purchase of : 1384455

Economics

31) If a person is holding money for the purchase of goods and services, this demand for money is known as

A) speculative demand.

B) precautionary demand.

C) transactions demand.

D) real balance demand.

E) nominal balance demand.

32) The “transactions demand” for money arises from the fact that

A) there is uncertainty in the receipts of income.

B) there is uncertainty about the movement of interest rates.

C) households wish to have all their wealth in the form of money.

D) households decide to hold money in order to make purchases of goods and services.

E) households want to keep cash on had to buy bonds if bond prices drop.

33) The “precautionary demand” for money arises from the

A) fear that interest rates will fall.

B) fear that interest rates will rise.

C) need to make predictable purchases of goods and services.

D) uncertainty about when some expenditures will be necessary.

E) desire to avoid paying interest on credit purchases.

34) Other things being equal, the transactions demand for money tends to increase when

A) interest rates rise.

B) interest rates stop rising.

C) national income rises.

D) national income falls.

E) the price level falls.

35) Consider the demand for money. If real GDP falls, other things being equal, we can expect

A) an increase in the speculative demand for money.

B) an increase in the total demand for money.

C) a decrease in transactions demand for money.

D) an increase in transactions demand for money.

E) an increase in precautionary demand for money.

36) Suppose an economic analyst suggests that investors should now hold cash instead of stocks or bonds. The analyst is probably encouraging an increase in money balances for which reason?

A) transaction demand

B) precautionary demand

C) speculative demand

D) present value demand

E) portfolio demand

37) A firm that holds cash to avoid penalties associated with the late payment of bills is demonstrating which type of demand for money?

A) transactions demand

B) precautionary demand

C) speculative demand

D) present value demand

E) risk-return demand

38) Among other things, people hold cash balances for which of the following reasons?

1) to meet unforeseen emergencies

2) to maximize their returns on interest-earning assets

3) to guard against the uncertainty of the timing of receipts and payments

A) 1 only

B) 2 only

C) 3 only

D) 1 and 2

E) 1 and 3

39) Speculative demand for money arises from the desire by individuals and firms to hold cash balances

A) for speculative equity purchases.

B) in anticipation of changes in interest rates and bond prices.

C) to meet unforeseen business expenses.

D) in anticipation of investing in capital purchases for the firm.

E) to maintain adequate cash flow in case of inflation.

40) In the basic AD/AS macro model, it is assumed that, for any given interest rate, the demand for money depends on the

A) aggregate demand for goods and services.

B) level of government spending.

C) rate of growth of real GDP.

D) level of taxes.

E) level of real GDP and the price level.

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July 1, 2023

Distinguishing Inductive and Deductive Reasoning

Required Resources
Read/review the following resources for this activity:

· Textbook: Chapter 8, 9, 17 (Introduction)

· Lesson

· Minimum of 1 scholarly source (in addition to the textbook)

Click on the following tabs to review the concepts that will be addressed in this activity:

A valid structure is the way in which an argument is put together that assures it will pass the test of logical strength.

Deductive: In deductive arguments, the speaker asserts that her premises are true and, therefore, her conclusion must be accepted. Remember that in a deductive argument, logical strength does not depend on the literal truth of the premises. When we test for logical strength, we assume the premises are true. Once we determine that the argument is logically valid, we can then look at the actual – not presumed – truth of the premises.

Inductive: In inductive arguments, the speaker presents evidence that she claims support the probable truth of her conclusion – that her conclusion is the most likely true – and so you should accept it.

The Basic Structure of Deductive and Inductive Arguments
Argument examples:

Deductive Argument Example: “Tightening laws restricting the use and possession of firearms does not protect average law-abiding citizens; it only puts them at greater risk. Enforcing licensing restrictions, trigger locks, and waiting periods makes it more difficult for law-abiding citizens to defend themselves, and, as a result, encourages criminal activity. Only criminals benefit when ordinary citizens are deprived of their right to own a firearm and protect themselves, their homes, and their families" (Lott, 2000, p. 169)

Lott, J., (2000). More guns, less crime: Understanding crime and gun-control laws. University of Chicago Press.

The argument boils down to this:

· Laws that are obeyed by ordinary citizens and not obeyed by criminals are laws that put ordinary citizens at risk.

· Tight gun laws are laws that are obeyed only by ordinary citizens.

· Tight gun laws put ordinary citizens at risk.

However, the argument itself is composed of three intertwined syllogisms:

Only ordinary citizens are persons who respect tight gun laws.
Criminal persons are not ordinary citizens.
Therefore, criminals do not respect tight gun laws.

Tight gun laws restrict only ordinary citizens.
No criminal is an ordinary citizen.
No criminal is restricted by tight gun laws.

Laws that disfavor the good are laws that favor the bad.
Tight gun laws favor the bad.
Therefore, tight gun laws disfavor the good.

Notice that you cannot remove any of the “legs” and maintain the claim. Notice, also, that the reasons are closely connected and depend on or follow from each other. Notice, also, that the first premise (called the major premise) must be accepted as true, or the entire argument fails.

Inductive Argument: The United States is too dependent upon foreign oil. According to the U.S. Department of Energy, we rely on imported foreign oil for about 45% of our needs. Of the imported oil, most comes from Canada, but 22% comes from countries in the Middle East. Undeniably, this dependence shapes our foreign policy. We have vast oil reserves that could make us energy independent. Development of these resources would produce much-needed jobs, many of them in areas of the country suffering most from the recession. We should be developing an energy policy that makes us energy independent.

· Reason: We import 45% of our oil.

· Reason: Middle East oil imports shape our foreign policy.

· Reason: Our vast oil reserves could make us energy independent.

· Reason: Development of oil reserves could produce much needed jobs.

· Conclusion: For any or all of the above, independent reasons, we should become energy independent.

Notice that any one of these reasons, standing alone, could support the conclusions; they are not logically related to one another as they would be in a syllogism.

Initial Post Instructions
For the initial post, address the following:

· Find and post examples of deductive and inductive arguments. Do NOT use an argument example which clearly indicates it is an example of an inductive/deductive argument.

· For each example, evaluate its logical strength, using the concepts and ideas presented in the textbook readings, the lesson, and any other source you find that helps you to evaluate the validity (deductive) or strength (inductive) of the argument. You can use examples from the text, or you can find examples elsewhere.

oEditorials and opinion columns are a good source, as are letters to the editor. Blogs will also often be based on arguments.

oUse mapping and evaluative techniques to make sure it is an argument.

· Is it inductive or deductive? Explain why.

· Does it pass the tests of validity and strength? Explain.