When the nominal dollar interest rate ________, money demand will ________, and the general price level will ________
A) increases; decrease; increase
B) increases; increase; increase
C) increases; decrease; decrease
D) increases; increase; decrease
E) decreases; increase; increase
A
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Explain why choices respond to incentives and think of three incentives to which you have responded today
What will be an ideal response?
A trade deficit means:
A) the country has positive net savings, which it lends abroad. B) the country has negative net savings, which it lends abroad. C) the country has positive net savings, which it borrows from abroad. D) the country has negative net savings, which it borrows from abroad.
Discount rates are __________ every two weeks by the directors of each regional Federal Reserve Bank but are __________ by the Board of Governors
A) determined; established B) established; determined C) recommended; established D) determined; recommended
We don't typically see wages __________ in response to an economic downturn because ____________.
A. rise; they are "sticky," and are slow to respond to shifts in the economy B. rise; they cannot rise above the equilibrium in any circumstance C. fall; they are "sticky" and are slow to respond to shifts in the economy D. fall; they cannot fall below where they were previously set due to inflation