The liquidity preference theory ________
A) distinguishes between nominal and real quantities
B) shows that demand for real balances depends on real income
C) shows that demand for real balances depends on the nominal interest rate
D) all of the above
E) none of the above
D
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The quantity theory of money asserts that an increase in the quantity of money
A) will decrease the price level by an offsetting amount. B) by n percent will lead to an increase in the price level by n + 1 percent. C) will lead to an equal percentage increase in real GDP. D) will lead to an equal percentage increase in the price level.
Ann Taylor and Gap are two clothing companies that must decide on the leading color palette for next season. Their sales depend on the choice of color they make as well as the choice their competitor makes
Their sales are summarized in the payoff matrix above. Using the payoff matrix A) the only Nash Equilibrium is for both companies to choose pink. B) the only Nash Equilibrium is for both companies to choose orange. C) the Nash Equilibrium is for one company to choose pink while the other company chooses orange. D) there are two Nash Equilibria: either both companies choose pink or both choose orange.
A system in which depository institutions hold reserves that are less than the amount of total deposits is
A. sweep accounts. B. the Federal Reserve System. C. the federal funds market. D. fractional reserve banking.
For perfectly price inelastic supply,
A. either supply or demand may set the price. B. price is solely determined by demand. C. only a government can set the price. D. price is solely determined by supply.