The demand for money is likely downward sloping because
A. interest sensitive consumption and business investment are both negatively impacted by increases in the interest rate.
B. the government can always borrow what it wants.
C. interest sensitive consumption and business investment are both positively impacted by increases in the interest rate.
D. the marginal revenue product of labor is decreasing.
Answer: A
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
How do we graph a relationship among more than two variables?
What will be an ideal response?
The higher the marginal income tax rate, the
a. higher the MPC out of disposable income. b. lower the MPC out of disposable income. c. higher the autonomous expenditure multiplier. d. lower the autonomous expenditure multiplier. e. None of the above
You put $150 in the bank two years ago and forgot about it. The bank sends you a notice that you now have $169.34 in your account. What interest rate did you earn?
a. 5.50 percent b. 5.65 percent c. 6.25 percent d. 7.05 percent