According to liquidity preference theory, if there were a surplus of money, then
a. the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium.
b. the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium.
c. the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium.
d. the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.
b
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An increase in the U.S. interest rate differential increases the demand for dollars
Indicate whether the statement is true or false
The economist in the 1930s who is credited with key insights into causes of economic downturns was:
A. John Maynard Keynes B. Ben Bernanke C. Adam Smith D. David Ricardo
David and Asher buy the same pair of sneakers, but each in the wrong size. David proposes a size swap with Asher. This is an example of a. barter, since the sneakers in the correct size represent a medium of exchange
b. barter, since the sneakers in the correct size have intrinsic value to both David and Asher. c. money, since the sneakers in the correct size do not have any intrinsic value. d. money, since the sneakers in the correct size represent a medium of exchange.
A decrease in demand would be represented by
A) the price of a good going up. B) a downward movement along the demand curve. C) an upward movement along the demand curve. D) a shift of the demand curve to the left.