People are likely to want to hold more money if the interest rate
a. increases making the opportunity cost of holding money rise.
b. increases making the opportunity cost of holding money fall.
c. decreases making the opportunity cost of holding money rise.
d. decreases making the opportunity cost of holding money fall.
D
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The Cambridge equation equates money demand as
A) a fraction of nominal GDP. B) a percentage of real GDP. C) a fraction of money supply. D) a ratio of spot exchange rates.
Quantity Supplied
What will be an ideal response?
Which of the following would result from an increase in the supply of a good?
A. Both equilibrium price and quantity would rise. B. Both equilibrium price and quantity would fall. C. Equilibrium price would rise, and equilibrium quantity would fall. D. Equilibrium quantity would rise, and equilibrium price would fall.
The relationship between the level of prices and the total demand for all goods and services is known as:
A. aggregate supply. B. market supply. C. aggregate demand. D. market demand.