An increase in the money supply, other things being constant
A. causes the price level to increase.
B. generates an increase in the demand for money.
C. causes the purchasing power of money to increase.
D. causes interest rates to rise.
Answer: A
You might also like to view...
With respect to the insurance market, what is adverse selection?
A) Adverse selection refers to the actions people take before they purchase an insurance policy. B) Adverse selection refers to the actions people take, after they purchase an insurance policy, that make the insurance company worse off. C) Adverse selection refers to people who purchase one type of insurance policy when they would have been better off purchasing a different policy. D) Adverse selection refers to the situation in which a person purchasing an insurance policy takes advantage of knowing more about his health than the insurance company knows.
If a firm acquires new machines that complement labor
A. there will be no effect on the marginal product of labor curve. B. the amount of labor services hired will decrease. C. the marginal revenue product of labor curve will shift upward. D. the marginal revenue product of labor curve will shift downward.
Interest-rate risk would not matter to which of the following bondholders?
A. A holder of a U.S. government bond. B. A holder of a U.S. government bond that plans on holding it until it matures. C. A holder of a U.S. government bond who plans on selling it in one year. D. A holder of a U.S. government bond indexed for inflation.
Because of automatic stabilizers, in recessions the government budget deficit ________, while in expansions the deficit ________.
A. falls; rises B. rises; falls C. falls; falls D. rises; rises