The transactions demand for money will shift to the
A. left when nominal GDP increases.
B. right when the interest rate decreases.
C. left when nominal GDP decreases.
D. right when the interest rate increases.
Answer: C
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In the short run ________
A) the more flexible wages and prices are, the more inflation responds to the output gap B) the more sticky wages and prices are, the more difficult to tell the difference between the short run and long run aggregate supply curves C) if wages and prices are sticky, aggregate output is always at its potential level D) all of the above E) none of the above
The market system is based upon _____
a. money b. voluntary exchange c. capitalism d. profits
Financial intermediaries are institutions that
A) produce money for the federal government. B) regulate the activities of stock and bond markets. C) act as middlemen in the process of directing funds from savers to investors. D) oversee the activities of government institutions such as the Federal Reserve.
If the price elasticity of supply in the kiwi fruit industry equals 1, supply is
a. perfectly elastic b. relatively elastic c. unit elastic d. relatively inelastic e. perfectly inelastic