If there is a permanent increase in the domestic money supply, then in the short run, which of the following will be TRUE?
a. The prices will adjust lower.
b. Domestic interest rates will increase.
c. Real money supply will increase.
d. Domestic money demand will permanently increase.
Ans: c. Real money supply will increase.
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Why is the price at which the quantity demanded equals the quantity supplied the equilibrium price?
What will be an ideal response?
More than 50 percent of all U.S. school children are bused to school
Indicate whether the statement is true or false
A firm in a competitive industry faces the following short-run cost and revenue conditions: ATC = $16; AVC = $8; and MR = MC = $12. This firm should
A) expand production and keep price constant. B) decrease production and raise its price. C) shut down. D) continue to operate at the same price and output level in the short run.
Which of the following must be true?
a. Savings must equal investment in an open economy. b. Savings must equal investment in a closed economy. c. Savings must equal consumption in an open economy. d. Savings must equal consumption in a closed economy.