Which of the following statements is consistent with a given (i.e., fixed) LM curve?
A) A reduction in the interest rate causes investment spending to increase.
B) A reduction in the interest rate causes money demand to decrease.
C) A reduction in the interest rate causes an increase in the money supply.
D) An increase in output causes an increase in demand for goods.
E) An increase in output causes an increase in money demand.
E
You might also like to view...
Which of the following is ALWAYS true for a profit-maximizing single-price monopolist?
A) P = MC B) P = MR C) MR = MC D) MC = ATC
Is there any set of relationships between price elasticity of supply and total revenue similar to the relationships between price elasticity of demand and total revenue?
What will be an ideal response?
One reason Henry Ford is famous was for instituting:
A. efficiency wages in an effort to reduce worker absenteeism. B. assembly lines in an effort to reduce worker turnover. C. minimum wages in an effort to increase productivity. D. unemployment benefits in response to the first unionized workers.
When two goods are substitutes, a shock that raises the price of one good causes the price of the other good to
A) remain unchanged. B) decrease. C) increase. D) change in an unpredictable manner.