When the interest rate increases, people will adjust their precautionary demand for money
A. downward.
B. not at all.
C. upward.
D. downward or upward depending upon the actual supply of money.
Answer: A
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During the Civil War, inflation caused U.S. prices to rise by roughly:
a. 12 percent. b. 32 percent. c. 54 percent. d. 76 percent.
Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets
a. True b. False
Other things constant, an increase in the real GDP of a country will: a. increase the price level
b. shift the demand for money curve rightward. c. shift the demand for money curve leftward. d. decrease the nominal interest rate. e. decrease the quantity of money demanded.
The amount of checkable deposits in an economy cannot exceed the amount of currency that the government has issued
a. True b. False Indicate whether the statement is true or false