Exhibit 20-3 Money market demand and supply curves
?
As shown in Exhibit 20-3, assume the money supply curve shifts rightward from MS1 to MS2 and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:
A. higher investment, lower real GDP, and lower price level.
B. lower investment, lower real GDP, and lower price level.
C. higher investment, higher real GDP, and higher price level.
D. higher interest rate and no effect on real GDP or the price level.
Answer: C
You might also like to view...
The core personal consumption expenditures price index excludes
A) food and energy prices. B) energy and housing prices. C) food and housing prices. D) housing and health care prices.
Which of the following statements concerning pollution is correct?
A) Economic efficiency requires that pollution be completely eliminated. B) Economic efficiency dictates that the optimal amount of pollution arises at the point at which price equals private marginal cost. C) Pollution should be reduced to the point at which the marginal benefit from further reduction equals the marginal cost of further reduction. D) Pollution should be reduced to the extent necessary to return production to the production possibilities frontier.
James used $200,00 . from his savings account that paid an annual interest of 10% to purchase a hardware store. After one year, James sold the business for 300,000 . His accountant calculated his profit to be:
a. $300,000 b. $100,000 c. $80,000 d. $20,000
Goods with few available substitutes tend to have inelastic demand curves
a. True b. False Indicate whether the statement is true or false