Assume the money market is initially in equilibrium. If the price level decreases, then according to liquidity preference theory there is an excess

a. supply of money until the interest rate increases.
b. supply of money until the interest rate decreases.
c. demand for money until the interest rate increases.
d. demand for money until the interest rate decreases.


b

Economics

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a. oversupplied; external cost b. undersupplied; external benefit c. oversupplied; external benefit d. undersupplied; external cost

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The money supply is 4,000 . nominal GDP is 8,000 . and real GDP is 2,000 . Which of the following is 2?

a. the price level and velocity. b. the price level but not velocity. c. velocity but not the price level. d. neither the price level nor velocity.

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Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

a. 150 burgers b. 225 burgers c. 300 burgers d. 450 burgers

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In moving from a private closed to a mixed closed economy in the aggregate expenditures model, taxes:

A. must be added to gross investment. B. must be added to saving. C. must be added to consumption and gross investment. D. have no impact upon the equilibrium GDP.

Economics