The money demand curve will shift to the right if:
A. the nominal interest rate decreases.
B. the price level increases.
C. the nominal interest rate increases.
D. the price level decreases.
Answer: B
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Consumers can spend their entire disposable income.
Answer the following statement true (T) or false (F)
On average, the inventory/sales ratio has been ________ over time.
A. increasing B. unchanged C. declining D. very volatile
Two economists from Ohio University estimated that the demand curve for kerosene in Indonesia was such that a 10 percent increase in the price reduced the quantity demanded by 2.2 percent and that a 10 percent increase in the price of electricity increased the demand for kerosene by 1.6 percent. This indicates that (i) the demand for kerosene is price inelastic and (ii) kerosene and electricity are substitutes. Which of these two statements is correct?
A. i and ii B. i not ii C. ii not i D. neither i nor ii
A kinked demand curve
a. results from the heavy advertising expense required. b. occurs because, when one seller lowers the price, no one else will do so. c. is a basic characteristic of monopolistic competition markets. d. tends to be inelastic for price decreases and elastic for price increases.