In Figure 4-5 above, suppose that real income is YB and the money market is in equilibrium. The interest rate at this point is ________ to support commodity market equilibrium, so that involuntary inventory changes are ________
A) too low, positive
B) too low, negative
C) just right, zero
D) too high, positive
E) too high, negative
B
You might also like to view...
Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months. Over this same period, the price of jet fuel has risen and consumer incomes have fallen
Which of the following best explains the falling prices of airline tickets? A) The supply curve for airline tickets has shifted to the left while the demand curve for airline tickets has shifted to the right. B) The demand curve for airline tickets has shifted to the left more than the supply curve has shifted to the left. C) The supply curve for airline tickets has shifted to the left more than the demand curve has shifted to the left. D) The demand curve and the supply curve for airline tickets have both shifted to the right.
The portfolio theories of money demand state that the demand for real money balances is ________ related to income and ________ related to the nominal interest rate
A) positively; negatively B) positively; positively C) negatively; negatively D) negatively; positively
Which one of the following is not true about poverty in the United States? a. The percentage of the population below the poverty line has decreased significantly since 1960 in the U.S., but not for every racial group
b. Blacks and Hispanics are disproportionately poorer. c. Over half of single-mother headed households are considered to be poor. d. Young families and large ones are at a high risk of living in poverty. e. It has declined steadily since 1960.
A supply-side policy to cure inflation would include
A. A minimum wage increase. B. A reserve requirement decrease. C. Deregulation. D. Tax increases.