Along an LM curve at lower interest rates there is __________ money demanded, so income must be lower to __________ the demand for transactions balances if the total demand for money is to equal the fixed supply
A) less; decrease
B) less; increase
C) more; decrease
D) more; increase
C
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Institutions:
A) are mostly outside of human control. B) place constraints on human behavior, and these constraints may not be absolute. C) cannot be changed over time. D) do not affect incentives.
Which of the following is true of a simultaneous move game?
A) Players choose their actions after knowing the action of the first player. B) All relevant benefits and costs of each action are taken into account. C) It involves strategic interactions among a large number of players. D) This game cannot be represented by a payoff matrix.
Your aunt gives you a PepsiCo bond with face value of $5,000 . It will mature in two years. Currently, the interest rate is 10 percent (0.10) per year. How will the value of the bond change if the interest rate falls to 5 percent tomorrow morning?
a. It will rise by $413.22. b. It will rise by $402.90. c. It will rise by $432.90. d. It will fall by $432.90. e. It will fall by $402.92.
If gold miners expect the price of gold to be 100% higher one year from now, they will probably
A) decrease the supply of gold they bring to market now. B) increase the supply of gold they bring to market now. C) increase the quantity supplied of gold, but supply will remain unchanged. D) do none of the above.