Assume that investment does not depend on the interest rate. A reduction in the money supply will cause which of the following for this economy?
A) no change in the interest rate
B) no change in output
C) a reduction in investment
D) an increase in investment
B
You might also like to view...
Information gathering for an adverse selection happens
a. Before the agent is hired b. After the agent is hired c. After the agent is fired d. None of the above
What property of the von-Neumann Morgenstern utility function is related to risk aversion?
a. Its upward slope b. Its downward slope c. Its convexity d. Its concavity
Critics of an equal distribution of income argue that the effect would be to reduce the incentive to be productive
a. True b. False Indicate whether the statement is true or false
According to the textbook application, product remanufacturing
a. begins with the collection of used products b. involves the dismantling of used products c. comprises a small market of less than $5 million in revenues d. none of the above e. (a) and (b) only