The LM curve describes the relationship between interest rates and GDP for which the supply of money is equal to the demand for real balances, holding _____ constant.
A) expectations
B) tastes and preferences
C) the quantity of money
D) expectations, tastes, and the quantity of money
Ans: C) the quantity of money
You might also like to view...
Asymmetric information is a situation in which ________
a. both buyers and sellers are equally uninformed, and both must invest in search in order to make an informed decision b. both buyers and sellers are fully informed c. one side of the market has more reliable information than the other side does d. one side of the market has identical reliable information as the other side
The heavy reliance on private health insurance in the U.S. began during World War II, as a:
A. Legal requirement for employment B. Patriotic duty of firms C. Way of imitating European employment practices D. Response by employers to the wage controls in effect then
Which of the following statements is true?
A) In a closed economy, government spending equals zero. B) A nation with a high savings rate will accumulate capital rapidly. C) A nation with a high savings rate will accumulate capital slowly. D) In a closed economy, aggregate consumption equals zero.
When, because of hiring and firing costs, firms retain workers in a recession that they would otherwise lay off, there is said to be
A) labor hoarding. B) a decline in capacity utilization. C) voluntary unemployment. D) involuntary unemployment.