Suppose the equilibrium interest rate in the money market is 5 percent and the current interest rate is 7 percent. As a result
A) the interest rate rises.
B) real GDP increases.
C) the demand for money curve shifts rightward.
D) people buy bonds and the interest rate falls.
D
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An important condition required for economic growth is
A) economic freedom. B) a libertarian government. C) a totalitarian government. D) a democratic government. E) the incentive to limit international trade so that all economic growth remains within the country.
If the Fed buys more bonds from the public, then the money supply will:
A. Decrease and the aggregate demand curve will shift to the right. B. Increase and the aggregate demand curve will shift to the right. C. Increase and the aggregate demand curve will shift to the left. D. Decrease and the aggregate demand curve will shift to the left.
The rule of rational choice holds that people will alter their behavior if ______.
a. expected marginal benefits outweigh expected marginal costs b. they can afford both the money costs and the non-money costs c. comparative advantages are greater than absolute advantages d. changes to their course of action are slow and incremental
When a variable is top coded, its value is known only up to a certain threshold.
Answer the following statement true (T) or false (F)