An increase in the nominal interest rate, other things constant, will:
a. shift the money demand curve to the right
b. shift the money demand curve to the left.
c. increase the quantity of money people choose to hold.
d. decrease the quantity of money people choose to hold.
e. have no impact on the money demand curve.
d
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You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. Your roommate still enjoys Ramen noodles very much and buys even more, but you plan to buy fewer Ramen noodles in favor of foods you prefer more. When looking at income elasticity of demand for Ramen noodles, yours would
a. be negative and your roommate's would be positive. b. be positive and your roommate's would be negative. c. be zero and your roommate's would approach infinity. d. approach infinity and your roommate's would be zero.
A recessionary gap
A. Would cause a depletion of inventories. B. Is the amount by which the rate of actual spending falls short of full-employment GDP. C. Would occur if total output were less than aggregate demand. D. Is the amount by which total spending exceeds GDP.
Suppose the price of a liter of soda is $2. If Sara is willing to pay $3 for that liter of soda, her consumer surplus when she buys the soda is:
A. $0. B. $1. C. $2. D. $3.
Deregulation of the railroad industry led to
A. Reconfigured routes and services. B. Increased operating costs. C. Decreased competition. D. Lower profits.