Refer to Figure 10.8. Other things equal, an increase in the demand for money and the accompanying change in the real interest rate would best be represented by
A) a movement from point A to point C.
B) a movement from point A to point D.
C) a shift from LM1 to LM2.
D) a shift from LM2 to LM1.
A
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The Medicare pay-as-you-go system is jeopardized by
a. an overly generous fee schedule that pays physicians more than private insurance for most procedures. b. the changing demographics of the U.S. population with an increasing percentage over the age of 65 c. a reliance on the premiums paid by the elderly themselves to fund a majority of the total cost of the system. d. allowing physicians to balance bill their patients. e. the rising costs of long-term care.
Quantitative easing refers to a situation in which conventional monetary policy is ineffective in fighting an economic slump because nominal interest rates are up against the zero bound
a. True b. False Indicate whether the statement is true or false
A surplus or shortage in the money market is eliminated by adjustments in the price level according to
a. both liquidity preference theory and classical theory. b. neither liquidity preference theory nor classical theory. c. liquidity preference theory, but not classical theory. d. classical theory, but not liquidity preference theory.
If an investor had a $25,000 long-term capital gain on a $100,000 investment from 1984 to 2010, her real rate of return was most likely
A. equal to the expected rate of inflation. B. equal to the nominal rate of inflation. C. zero. D. negative.