If the demand for money increases, but the Fed keeps the money supply the same:
a. nominal interest rates will rise and aggregate demand will fall.
b. nominal interest rates will rise and aggregate demand will rise.
c. nominal interest rates will fall and aggregate demand will fall.
d. nominal interest rates will fall and aggregate demand will rise.
a
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When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:
A. can increase its profits by hiring any amount less than this point. B. can increase its profits by hiring any amount greater than that point. C. should consider shutting down since it is not earning profits. D. has found the profit-maximizing quantity of labor to hire.
Suppose the MPC is .6 and consumption increases by $6 billion. Consequently, total income through the multiplier effect will:
a. Increase by $12 billion b. Decrease by $15 billion c. Increase by $15 billion d. Increase by $10 billion
A country facing a balance of payments deficit will change the pegged value of its currency; this is called a revaluation.
Answer the following statement true (T) or false (F)
A drought has destroyed orange crops in California. The drought has caused
A. a shortage because people cannot obtain as many oranges as they wish to buy at the pre-drought price. B. scarcity because there are less oranges now than people want. C. a shortage because orange growers will have less income. D. scarcity because people have to switch to oranges grown in Florida.