If an person believes that it is likely that interest rates will increase, she is likely to hold less
A) money.
B) real assets.
C) stock.
D) bonds.
A
You might also like to view...
Does the money demand curve have a positive slope or a negative slope? Why does it have this slope? Explain why an increase in the variable on the vertical axis of the money demand curve causes either an increase or a decrease in the variable on the
horizontal axis of the money demand curve.
In the Keynesian model in the long run, a decrease in the money supply will cause
A) a decrease in output and an increase in the real interest rate. B) an increase in the real interest rate but no change in output. C) a decrease in the real interest rate and a decrease in output. D) no change in either the real interest rate or output.
Education and training of workers would best be categorized as
A) land.
B) labor.
C) physical capital.
D) human capital.
An aggregate supply curve may be horizontal over some range because within that range
A) a higher price level leads to higher interest rates, which reduce the money supply and consumer spending B) changes in the aggregate price level do no induce substitution C) output cannot be increase unless prices and interest rates increase D) rigid prices prevent employment from fluctuating E) resources are underemployed and an increase in demand will be satisfied without any pressure on the price level