When the demand for money becomes less responsive to changes in income, the LM curve becomes ________ and it also shifts to the ________
A) flatter, left
B) flatter, right
C) steeper, left
D) steeper, right
B
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A demand-pull inflation is caused by an increase in the demand for output. Therefore, economists say that this type of inflation is actually good for the economy
a. True b. False Indicate whether the statement is true or false
Which of the following is included in the M2 money stock?
a. bonds b. stocks c. gold d. savings-type accounts e. credit card balances
The estimate of potential GDP would decrease if
a. the rate of capital depreciation increased. b. the labor force decreased. c. the price level grew. d. All of the above would increase potential GDP.
Budget deficits are inflationary when
a. the Federal Reserve contracts the money supply. b. the economy has lots of slack and the aggregate supply curve is horizontal. c. the economy is at full employment and the aggregate supply curve is vertical. d. private citizens buy the bonds to finance the debt.