A decrease in the money supply
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP.
b. lowers the interest rate, causing a decrease in investment and an increase in GDP.
c. raises the interest rate, causing an increase in investment and a decrease in GDP.
d. raises the interest rate, causing an increase in investment and an increase in GDP.
e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
Answer: e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
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List the various arguments against free trade
What will be an ideal response?
Refer to the above figure. What is the socially optimal point of production?
A) P1 and Q1. B) P4 and Q1. C) P1 and Q4. D) P3 and Q2.
Financial intermediaries make the allocation of resources more efficient by
A. Lending or investing the savings they hold. B. Reducing search and information costs in the financial markets. C. Transferring purchasing power from savers to dissavers. D. Spreading risk out over many individuals.
An example of the law of variable input proportions can be found in
A. the law of increasing returns to scale. B. the law of diminishing marginal returns. C. the law of large numbers. D. the law of demand.