John reads in a local newspaper that a decrease in the demand for money has resulted in a decrease in the interest rate. He realizes that this is the prime time to buy a car with low interest rates. Which of these factors is driving John's demand in this example?
a. The interest rate effect
b. The exchange rate effect
c. The wealth effect
d. The accelerator effect
a
Economics
You might also like to view...
If the Fed buys $10 million dollars in government securities, and the required reserve ratio is 20 percent, the banking system is able to expand the money supply by:
A. $10 million. B. $50 million. C. $2 million. D. $40 million.
Economics
What are the four phases of the business cycle.
What will be an ideal response?
Economics
The WTO and GATT promote trade by:
A. reducing tariffs. B. eliminating quotas. C. reducing agricultural subsidies. D. All of these.
Economics
If the central bank increases the money supply, in the short run, the price level
a. and unemployment rise. b. rises and unemployment falls. c. falls and unemployment rises. d. and unemployment fall.
Economics