When income increases, the money demand curve shifts to the ________, which ________ the interest rate with a fixed money supply.
A) right; increases
B) right; decreases
C) left; increases
D) left; decreases
Ans: A) right; increases
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Suppose the market clearing rent is $500 per month, but a rent control is established at $400 per month. Which is most likely to emerge?
A) The demand for apartments would increase. B) The supply of apartments would increase. C) The scarcity of apartments would decrease. D) The quantity of apartments demanded would exceed quantity supplied.
In a situation in which internal costs differ from social costs, we say that there exists a(n)
A) welfare loss. B) welfare benefit. C) internality. D) externality.
Personal income taxes
a. make recessions and inflationary episodes more severe b. make recessions and inflationary episodes less severe c. make recessions more severe and inflationary episodes less severe d. make recessions less severe and inflationary episodes more severe e. have no effect on the severity of recessions and inflationary episodes
Which of the following is true of minimum-wage laws?
a. They affect skilled workers' wages. b. They create above-equilibrium wages for some unskilled workers. c. They create a shortage of unskilled labor. d. They negatively affect the employment of skilled workers.