A change in the money supply will change investment when
A) the money supply is a function of the price level.
B) investment is interest-sensitive.
C) investment depends only on the level of GDP.
D) investment is interest-insensitive.
E) the supply for money is a function of the interest rate.
B
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Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because, given fewer opportunities to take on risk, risk-prone entrepreneurs will be discouraged from entering the banking industry
A) moral hazard B) adverse selection C) ex post shirking D) post-contractual opportunism
Mr. Calhoun owned a worn-out piece of farmland for growing cotton, which he had been unable to rent for years. Suddenly he was getting offers from cotton farmers to lease his land. What is the most likely explanation of this?
a. The price of cotton went down. b. The physical productivity of the land went up. c. Taxes on land went up. d. The price of cotton went up.
The average variable cost curve is a mirror image of the:
A. average product curve. B. total product curve. C. marginal product curve. D. marginal cost curve.
An economic principle that explains why people pursue different occupations is
A) absolute advantage. B) international trade. C) comparative advantage. D) NAFTA.