Other things constant, the quantity of money demanded varies directly with the market interest rate
Indicate whether the statement is true or false
false
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Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3% percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of
A. opportunity costs. B. imperfect information. C. marginal benefits that exceed marginal costs. D. normative economics.
The hypothesis that people attempt to stabilize their consumption over their entire lifetime is the
A) life cycle hypothesis. B) forward looking expectation hypothesis. C) permanent-income hypothesis. D) None of the above.
The goals of equity and ________________ are sometimes in conflict.
A. fairness B. efficiency C. capital
In terms of the price-real GDP diagram, a given expansion of the money supply will have a greater effect on prices the
A. steeper the aggregate supply curve. B. flatter the aggregate supply curve. C. higher the initial price level. D. lower the initial price level.