As the economy enters a strong expansion in which real GDP increases, which of the following occurs?
A) The demand for money decreases and there is a movement upward along the demand for money curve.
B) The demand for money increases and there is a movement downward along the demand for money
curve.
C) The demand for money curve shifts rightward.
D) The nominal interest rate falls as the demand for money curve shifts leftward.
E) The demand for money curve shifts leftward.
C
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Suppose the price of coffee is $6 per pound. If this price is an absolute price, what is meant by the phrase "$6 per pound"? If this price is a relative price, what is meant by the phrase "$6 per pound"?
What will be an ideal response?
An increase in government expenditure would shift the:
A) aggregate demand curve rightward. B) aggregate demand curve leftward. C) aggregate supply curve rightward. D) aggregate supply curve leftward.
How does moral hazard contribute to high bank leverage?
What will be an ideal response?
Long-run aggregate supply will decrease for all of the following reasons EXCEPT
A) reduced money wages. B) decreased human capital. C) reduction in the level of technology. D) decreased capital.