Using the interest rate as a measure of the opportunity cost of holding money, the demand for money curve
A) slopes upward with respect to the rate of interest.
B) is not affected by the price level.
C) slopes downward with respect to the rate of interest.
D) is vertical.
C
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When interest rates are lower, consumers and companies are able to borrow money cheaply in order to make major purchases. As a result, the demand for goods in an economy will generally
A) remain the same. B) increase. C) decrease. D) be minimally affected.
If a country runs a current account surplus and national private savings equals domestic investment, then the combined governmental accounts
A) must be balanced. B) must be positive. C) must be negative. D) could be either negative or positive, depending on the capital account. E) could be either negative or positive, depending on the net international investment position.
If an economy is growing, but experiences no inflation, this means
a. aggregate demand increased, but aggregate supply did not. b. aggregate supply decreased, but aggregate demand did not. c. aggregate demand and aggregate supply increased by the same amount. d. aggregate demand and aggregate supply decreased by the same amount.
Suppose good X is a normal good. Then a decrease in income would lead to
A. a movement along the demand curve. B. no shift of the demand curve. C. an outward shift of the demand curve. D. an inward shift of the demand curve.