People prefer to hold less of their wealth in the form of financial assets like bonds and term deposits when:
a. real GDP is at an all-time low
b. the real interest rate is above 10 percent.
c. the price level is very low.
d. the nominal interest rate is close to zero.
e. the nominal interest rate is very high.
d
You might also like to view...
Explain the following terms:
i. Compound returns ii. Principal iii. Rate of return on an investment iv. Holding period
An upward-sloping LM curve implies that the expenditure multiplier, when compared with the simple Keynesian expenditure multiplier, is
A) smaller. B) larger. C) equal. D) equal to the inverse of the simple multiplier.
Demand will be more inelastic when
a. the time the consumer has to adjust to price changes is short. b. the price of the good is high. c. the number of good substitutes is large. d. the consumption of the good is not very essential.
Which of the following is not a supply shifter?
A. Level of technology. B. Weather. C. Prices of inputs. D. Average income level.