An increase in interest rate will ______ the quantity of money demanded for transactions and ______ the quantity of money demanded for speculation.
a) increase; increase
b) increase; decrease
c) decrease; increase
d) decrease; decrease
Answer: d) decrease; decrease
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Any output combination along a production possibility frontier is associated with overused or unattainable resources
Indicate whether the statement is true or false
If the cross price elasticity of demand between goods A and B was equal to 0.5, those goods are substitutes
a. True b. False Indicate whether the statement is true or false
The real business cycle theory focuses on the impact that changes in long-run aggregate supply will have on the business cycle
Indicate whether the statement is true or false
Figure 3-9
Given the demand (D) and supply (S) for gasoline in , if the price of gasoline were $3 per gallon,
a.
consumers would wish to purchase more than was being supplied.
b.
producers would be supplying more than consumers wished to purchase.
c.
the quantity consumers wished to purchase would equal the quantity that producers wished to supply.
d.
there would be a tendency for the price of gasoline to rise.