Answer the following statements true (T) or false (F)
1) The higher the interest rate, the larger will be the amount of money demanded for transaction
purposes.
2) The asset demand for money varies inversely with the nominal GDP.
3) Bond prices and interest rates are directly or positively related.
4) The Fed reduces interest rates mainly by selling government securities.
1) F
2) F
3) F
4) F
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The longer the time that has elapsed since the price of a good changed, the
A) more elastic the demand for that good. B) steeper the demand curve. C) less elastic the demand for that good. D) smaller the amount of that good bought. E) fewer substitutes available for the good.
How can a global savings glut affect the United States?
A) It can reduce the world real interest rate, thus encouraging borrowing by Americans. B) It can increase the world real interest rate, thus encouraging saving by Americans. C) It can reduce the supply of loanable funds for the United States. D) It can reduce the demand for loanable funds for the United States.
If employees and employers always accurately forecast inflation, what is the shape of the Phillips curve?
a. It is vertical in the short run, and upward sloping in the long run. b. It is downward sloping in the short run, and vertical in the long run. c. It is upward sloping in the short run, and horizontal in the long run. d. It is vertical in the short run and long run.
All normal supply curves slope from the_____________________of the graph to the__________.
Fill in the blank(s) with the appropriate word(s).