George makes 250 a week working as a student aid. When he cashes his check he takes 100 to the cashiers office to pay part of his tuition. 25 goes to paying off his books, 75 goes for entertainment and 50 he keeps for unexpected expenditures.
Which of the following statements is TRUE?
A) The transactions demand for money is 125, the precautionary demand is 75 and the asset demand is 50.
B) The transactions demand for money is 0, the precautionary demand is 250 and the asset demand is 0.
C) The transactions demand for money is 200, the precautionary demand is 50 and the asset demand is 0.
D) The transactions demand for money is 250, the precautionary demand is 0 and the asset demand is 0.
Question 2
If the net public debt expanded last year, then which of the following most likely occurred during the year?
A) The government's budget was balanced.
B) The government's tax collections exceeded its spending.
C) The government experienced a budget surplus.
D) The government experienced a budget deficit.
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