The interest-rate effect
a. depends on the idea that increases in interest rates decrease the quantity of goods and services demanded.
b. depends on the idea that increases in interest rates decrease the quantity of goods and services supplied.
c. is responsible for the downward slope of the money-demand curve.
d. is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve.
Ans: a. depends on the idea that increases in interest rates decrease the quantity of goods and services demanded.
You might also like to view...
The equation of exchange states that the quantity of money
A) multiplied by the velocity of circulation equals nominal GDP. B) divided by price level equals real GDP. C) multiplied by nominal GDP equals the price level. D) divided by nominal GDP equals real GDP.
A given supply curve has a zero intercept. At the current equilibrium price the price elasticity of supply equals
A) 1. B) 0. C) 2. D) Not enough information is provided.
If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be: a. bowed inward toward the origin
b. bowed outward away from the origin. c. positively sloped. d. a straight line with a negative slope.
The principal-agent problem arises in corporations because the interests of the owners or stockholders are aligned with the chief executives who run the corporations for the owners.
Answer the following statement true (T) or false (F)