As the price level rises
a. people will want to hold more money, so the interest rate rises.
b. people will want to hold more money, so the interest rate falls.
c. people will want to hold less money, so the interest rate falls.
d. people will want to hold less money, so the interest rate rises.
a
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Increases in resources and efficiency would increase potential GDP
Indicate whether the statement is true or false
If the Federal Reserve increases the money supply, then initially there is a
a. shortage in the money market, so people will want to sell bonds. b. shortage in the money market, so people will want to buy bonds. c. surplus in the money market, so people will want to sell bonds. d. surplus in the money market, so people will want to buy bonds.
Positive economics is concerned with justifying a particular distribution of income.
Answer the following statement true (T) or false (F)
According to the law of demand, a demand curve:
A. Is upward sloping. B. Is downward sloping. C. Is a horizontal, or flat, line. D. Can slope either upward or downward based on consumer behavior.