When inflation rises, the nominal interest rate
a. rises, and people desire to hold more money.
b. rises, and people desire to hold less money.
c. falls, and people desire to hold more money.
d. falls, and people desire to hold less money
b
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In the figure above, if point "a" represents the original equilibrium and point "b" the new equilibrium, then
A) there has been an increase in supply. B) there has been an increase in demand. C) there has been a change in the quantity supplied and no change in supply. D) Both answers B and C are correct. E) Both answers A and B are correct.
Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports. b. The government should devalue the peso. c. The government should print more pesos to increase its supply. d. The government should allow the peso to appreciate. e. The government should allow the peso to depreciate.
Because the monopsonist takes into account the effect that employment expansion has on wages paid to existing workers, it will
A. employ less and pay less than the corresponding values under competition. B. be exempt from minimum wage laws. C. pay union workers more than nonunion workers. D. employ more and pay more than the corresponding values under competition.
Generally speaking, a country whose currency appreciates will experience, as a result,
A. Reduced aggregate demand as a result of a decrease in exports. B. Increased exports. C. Inflationary pressure from higher import prices. D. Increasing interest rates from capital inflow.