A decrease in the money supply causes the interest rate to rise so that investment falls
a. True
b. False
Indicate whether the statement is true or false
True
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Use the following graph to answer the next question.
All else held constant, higher inflation in the United States relative to that in Canada will cause a(n) ________.
A. decrease in the supply of U.S. dollars B. decrease in the value of the U.S. dollar in terms of the Canadian dollar C. increase in the value of the U.S. dollar in terms of the Canadian dollar D. increase in the demand for U.S. dollars
The study of the choices made by individuals is part of the definition of
A) microeconomics. B) positive economics. C) macroeconomics. D) normative economics.
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A decrease in the price of sugar used to make soft drinks is shown as a movement from point a to a point such as
A) none of the points that are illustrated. B) point b. C) point c. D) point d.
The theory of portfolio choice indicates that factors affecting the demand for money include
A) income. B) nominal interest rate. C) liquidity of other assets. D) all the above.