Higher nominal interest rates ________ the amount of money demanded and a higher price level ________ the amount of money demanded.
A. decrease; decreases
B. decrease; increases
C. increase; decreases
D. increase; increases
Answer: B
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A risk-preferring person is willing to pay
A) a risk premium. B) a fee to make a fair bet. C) to obtain decreasing marginal utility. D) None of the above.
Which of the following will occur if the aggregate quantity supplied is less than the aggregate quantity demanded?
A. Aggregate demand will shift to the right B. Aggregate supply will shift to the left C. There will be a shortage D. There will be a surplus
If a firm has constant returns to scale, the long-run cost curve will be downward-sloping.
Answer the following statement true (T) or false (F)
If the Federal Reserve conducts open market sales, the money supply ________, shifting the LM curve to the ________, everything else held constant
A) decreases; right B) decreases; left C) increases; right D) increases; left