Based on the model of the money market, when real GDP increases, the equilibrium interest rate should
A) stay the same.
B) increase.
C) decrease.
D) increase to the same extent that the supply of money increases.
B
You might also like to view...
Which nations make up the G8?
What will be an ideal response?
If the tax increases as the tax base increases, the tax is said to be
a. proportional. b. regressive. c. digressive. d. progressive.
Which best describes labor unions?
A. They are not generally accepted as an American institution. B. They are accepted as an American institution. C. They are more powerful today than they were 50 years ago. D. They were at the peak of their power in the early 20th century.
One of the dangers of growing government debt is that:
A. it makes monetary policy more difficult by tying up more of the money supply in loans to the government. B. it pushes down interest rates which can lead to overspending by households and businesses. C. more of the budget goes to pay interest on the debt, making it harder to act in a future recession. D. debts have to be repaid with future income.