Which of the following would be most likely to increase the demand for money?
a. An increase in the price level
b. A decrease in real income
c. An increase in the interest rate
d. A decrease in the cost of converting other assets into money
e. A decrease in the price level
A
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When economists refer to the "brain drain" in developing countries what do they mean?
What will be an ideal response?
How does advertising signal to consumers that the product is a good one?
a. By seeing famous people using the product, consumers infer that they too can be famous. b. By being willing to spend money on advertising, firms let consumers know the product is likely a good one since firms would not likely advertise a poor product. c. By making consumers laugh during commercials, firms are associating positive experiences with the product. d. Without allowing consumers to actually use the product, it is not possible for firms to signal to consumers the product's quality.
Suppose there are a series of forest fires that affect the lumber industry while, at the same time, consumers demand more wooden furniture. The wooden furniture market would experience
A. An increase in quantity and an indeterminate change in price. B. A decrease in price and an indeterminate change in quantity. C. An increase in price and an increase in quantity. D. An increase in price and an indeterminate change in quantity.
Other things the same, if the price level is lower than expected, then some firms believe that the relative price of what they produce has
a. decreased, so they increase production. b. decreased, so they decrease production. c. increased, so they increase production. d. increased, so they decrease production.