When the nominal interest rate rises, the quantity of money demanded decreases because
A) people will buy fewer goods and hence hold less money.
B) the price level also rises and people decrease their demand for money.
C) people shift funds from interest-bearing assets into money.
D) people shift funds from money holdings to interest-bearing assets.
D
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A good for which demand decreases when income increases is known as a(n) ________ good
A) normal B) inferior C) substitute D) complementary
Open market sales of bonds by the Federal Reserve drain reserves from the banking system and shift
a. the allocation of wealth between bonds and stocks b. the economy toward a trough in the business cycle c. the money supply curve leftward d. reserves to nonmember banks e. the demand for money curve leftward
If the government wishes to increase GDP by $1,000b, and the MPC is 0.6, it should increase its spending by:
A. $400b. B. $1,000b. C. $600b. D. $250b.
Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.
Answer the following statement true (T) or false (F)