The demand for money in an economy is high when the:
a. real GDP is low
b. personal tax rate is low.
c. unemployment rate is high.
d. price level is high.
e. interest rate is high.
d
You might also like to view...
What is the appropriate monetary policy response to a situation with deficient financial liquidity, when there is a liquidity trap?
A) an open market sale of government bonds B) a decrease in the interest rate on reserves C) an open market purchase of government bonds D) an increase in the interest rate on reserves
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.
The Fed frequently uses the discount rate and the required reserve ratio as instruments of monetary policy
a. True b. False Indicate whether the statement is true or false
The main goal of antitrust policy is to
A) encourage firms to produce at the MR = demand level. B) regulate natural monopolies. C) prevent the monopolization of industries. D) prevent the nationalization of industries.