As the price level rises, the demand for money
a. decreases because interest rates also increase.
b. decreases because consumers buy fewer goods and services.
c. increases because more money is needed for each transaction.
d. increases because investment spending will also increase.
c
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The data in the above table indicate that when the price level is 120
A) firms have unexpectedly low inventories, so prices will rise. B) inventories are at levels planned by firms. C) firms will plan to increase the level of output. D) firms have unexpectedly high inventories, so prices fall.
Each of the curves plotted in the graph shown in the above figure is known as a
A) Laffer curve. B) Phillips curve. C) Keynesian curve. D) Lorenz curve.
Natural gas prices in real terms have
a. increased sharply since 2008. b. closely followed the pattern of oil prices since 2008. c. risen dramatically during the past ten years. d. fallen sharply since 2008.
The classical dichotomy and monetary neutrality are represented graphically by
a. an upward-sloping long-run aggregate-supply curve. b. a vertical long-run aggregate-supply curve. c. an upward-sloping short-run aggregate-curve. d. a downward-sloping aggregate-demand curve.