Use the following graph of the demand for coffee to answer the question below.
Refer to the three demand curves for coffee and assume that coffee is a normal good. Which of the following would shift the demand for coffee from D1 to D2?
A. an increase in consumer incomes
B. a decrease in the price of coffee
C. an increase in the price of coffee
D. a decrease in consumer incomes
Answer: A
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Long-term interest rates are an example of
A) an intermediate target. B) an operating target. C) a monetary policy objective. D) a monetary policy tool.
Liquidity preference theory is most relevant to the
a. short run and supposes that the price level adjusts to bring money supply and money demand into balance. b. short run and supposes that the interest rate adjusts to bring money supply and money demand into balance. c. long run and supposes that the price level adjusts to bring money supply and money demand into balance. d. long run and supposes that the interest rate adjusts to bring money supply and money demand into balance.
When GDP decreases, consumption spending increases.
Answer the following statement true (T) or false (F)
According to the quantity theory:
A. unemployment is everywhere and always a monetary phenomenon. B. the equation of exchange does not hold true. C. inflation is everywhere and always a monetary phenomenon. D. real output is everywhere and always a monetary phenomenon.