Keynesians believe that the interest elasticity of money demand
a. is lower than that believed by monetarists.
b. is higher than suggested by monetarists.
c. is completely elastic.
d. is completely inelastic.
e. none of the above.
B
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Within the Keynesian cross, the adjustment towards equilibrium occurs through:
A) inflation. B) inventories. C) interest rates. D) none of the above.
If the economy is near full capacity, the effect of a negative aggregate demand shock is to
A) increase the level of aggregate demand. B) cause the price level to fall. C) increase the firm's cost of producing at every level of output. D) increase the level of employment.
Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
a. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. b. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded. c. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. d. As the interest rate rises, the demand for money curve shifts outward to the right.
A monopolist will not change its current behavior
A. unless it earns positive economic profits in the long run. B. if it earns positive economic profits in the long run. C. even if total revenue does not cover variable costs. D. unless demand is greater than marginal revenue.