A decline in the money stock will
a. shift the LM schedule to the right.
b. shift the LM schedule to the left.
c. not have any effect on the LM schedule.
d. shift the IS schedule downward and to the right.
A
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Consider the market for credit. When the demand for credit increases while the supply of credit remains unchanged,
A) the interest rate will decrease and the amount of credit provided in the market will increase. B) the interest rate will increase and the amount of credit provided in the market will increase. C) the interest rate will decrease and the amount of credit provided in the market will decrease. D) the interest rate will increase and the amount of credit provided in the market will decrease.
Suppose the government increases its expenditures by $100 billion and simultaneously reduces the money supply by $100 billion. We definitely know that
A) equilibrium GDP will fall. B) equilibrium GDP will rise. C) the interest rate will rise. D) the interest rate will fall.
An activist policy to promote high employment ________
A) could lead to inflationary pressures from an ensuing temporary negative supply shock B) might incentivize workers to push for higher wages beyond what productivity gains can justify C) could lead to inflationary pressures from an ensuing increase in aggregate demand D) all of the above E) none of the above
A price-discriminating monopolist will tend to charge a lower price to students if it believes that students: a. have a lower willingness to pay than other demanders. b. have a greater willingness to pay than other demanders. c. have very elastic demand curves
d. have nearly vertical demand curves.