Because an increase in the nominal interest rate raises the opportunity costs of holding money, the money demand curve:
A. shifts to the right.
B. slopes downward.
C. shifts to the left.
D. slopes upward.
Answer: B
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When the opportunity cost of holding money increases, then
A) the quantity of money supplied increases. B) people want to hold more money. C) the real interest rate falls. D) the nominal interest rate falls. E) people want to hold less money.
Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If Anna instead holds an oral auction between the two bidders and one bidder of each type shows up, she earn ___ from the auction
a. Just above $100 b. $100 c. Just above $70 d. $70
Sellers in a perfectly competitive market make special arrangements to deal with particular customers and stand to lose value if their relationship with those customers ends
Indicate whether the statement is true or false
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.