An increase in real GDP can shift
A) money demand to the right and decrease the equilibrium interest rate.
B) money demand to the right and increase the equilibrium interest rate.
C) money demand to the left and decrease the equilibrium interest rate.
D) money demand to the left and increase the equilibrium interest rate.
Answer: B
You might also like to view...
Governments contribute to increased average labor productivity in each of the following ways except by:
A. allowing the free and open exchange of ideas. B. maintaining political stability. C. imposing taxes on wages. D. establishing well-defined property rights.
The equation of exchange states that the price level is equal to
A) the quantity of money. B) velocity of circulation multiplied by the quantity of money divided by real GDP. C) real GDP multiplied by the velocity of circulation divided by nominal GDP. D) the velocity of circulation.
If, for a given percentage increase in price, quantity supplied increases by a proportionately larger percentage, then supply is
A) unit elastic. B) relatively inelastic. C) elastic. D) perfectly elastic.
A firm should make an investment if the expected return is greater than
A) the marginal cost of the investment. B) the fixed cost of the investment. C) the opportunity cost of the investment. D) the expected rate of inflation.