In the simple liquidity preference model, changes to the money supply will have a smaller effect on interest rates the:
A. steeper, more elastic is the money demand curve.
B. flatter, more elastic is the money demand curve.
C. flatter, less elastic is the money demand curve.
D. steeper, less elastic is the money demand curve.
Answer: B
You might also like to view...
Adam Smith's book, Wealth of Nations was published at the time of the
________ in taxes will decrease consumption spending, and ________ in transfer payments will increase consumption spending
A) A decrease; a decrease B) An increase; an increase C) An increase; a decrease D) A decrease; an increase
The AR(p) model
A) is defined as Yt = ?0 + ?pYt-p + ut. B) represents Yt as a linear function of p of its lagged values. C) can be represented as follows: Yt = ?0 + ?1Xt + ?pYt-p + ut. D) can be written as Yt = ?0 + ?1Yt-1 + ut-p.
If the market price of a product falls and as a result total revenue of firms falls, we can conclude that
A. demand is inelastic in this price range. B. the product's price is above the midpoint of its demand curve. C. the demand curve is horizontal. D. demand is elastic in this price range.