For a given money demand curve, an increase in money supply:
a. drives up the real interest rate
b. lowers the opportunity cost of holding money.
c. decreases the quantity of money demanded.
d. drives down the price level in an economy.
e. contracts the total output produced in an economy.
b
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What is the difference between economic and accounting profit? Why is a distinction between them important?
The net value to the federal government of the bonds currently held in the Social Security Trust Fund is
a. approximately $1 trillion. b. now approaching $2 trillion. c. greater than $2.5 trillion. d. zero, because the federal government is both the payee and recipient of the interest and principal represented by these bonds.
Oligopolies that produce identical products such as steel have
A. no control over the price of their product because of the availability of perfect substitutes. B. no control over the price of their product because of the large number of buyers in the market. C. some control over the price of their product because each firm sells a substantial share of the market. D. some control over the price of their product because of the small number of buyers in the market.
In which of the following ways do those who criticize advertising and those who support advertising disagree?
a. the effect of ads on prices b. the number of ads on TV c. the expense of ads for firms d. the importance firms place on ads