Refer to the information provided in Figure 25.1 below to answer the question(s) that follow.
Figure 25.1Refer to Figure 25.1. The money demand curve will shift from 
to 
if
A. interest rates rise.
B. the price level increases.
C. nominal income decreases.
D. interest rates fall.
Answer: C
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The government uses the antitrust laws in place:
A. to prevent all mergers that would create market power. B. ineffectively because the laws are outdated. C. increasingly over time, as market power is getting more concentrated. D. to break up and prevent monopoly power in markets.
According to classical economists, in the quantity theory of money,
a. the price level is strictly a function of the supply of money b. the supply of money is strictly a function of the price level c. if output is constant, an increase in the quantity of money will cause the price level to fall d. the money supply and the price level are inversely related e. the money supply is controlled by the government which is why we have had moderate (and sometimes more than moderate) inflation
If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to remain the same. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to rise.
An expected increase in the money supply will tend to cause
A) an increase in stock prices. B) a reduction in stock prices. C) no change in stock prices. D) an ambiguous effect on stock prices.