In Keynes's view, an excess quantity of money supplied causes people to:
A. sell bonds and the interest rate rises.
B. buy bonds and the interest rate falls.
C. buy bonds and the interest rate rises.
D. increase speculative balances.
Answer: B
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Economic growth is measured by the percentage change in: a. potential nominal GDP
b. structural unemployment. c. the rule of 72. d. potential real GDP (LRAS).
Which of the following is not an autonomous determinant of consumption expenditures?
a. real wealth b. the interest rate c. tastes and preferences d. current disposable income
Fumiyo deposits $90,000 into Blue Flag Bank and Lyle deposits $75,000. Blue Flag Bank’s required reserve ratio is 11 percent. How much of these two deposits can the bank lend to borrowers?
a. $146,850 b. $18,150 c. $15,375 d. $150,000
Which of the following is NOT an example of an externality?
A) A cookie company emits a wonderful aroma in the air that makes people smile. B) The neighbor's wind chimes interfere with your sleep. C) A firm lays off 100 workers. D) Cancer-causing chemicals are dumped into the drinking water supply of a city.