In a "liquidity trap,"
A) the demand for money is infinite.
B) the LM curve is a vertical line.
C) the nominal interest rate on short-term assets is relatively high.
D) money supply changes have a strong impact on interest rates.
A
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According to your textbook, what is the general rule to follow in order to maximize net revenue?
A) Take any action if, but only if, the expected marginal revenue exceeds the expected marginal cost. B) Take any action you expect will not be copied by your competitors. C) Take as many innovative actions as you can, and leave the copying up to smaller firms in the market because they are least likely to increase their market share. D) Charge the lowest possible price.
During an economic slump such as the 2008 recession, what pricing strategies could a fast-food chain such as McDonald's use to maintain its sales? Use some of the concepts discussed in this chapter in your answer
What will be an ideal response?
Price discrimination results in _____________ than would be observed under a single-price monopoly
a. higher output and lower costs b. lower output and higher costs c. higher output and higher costs d. lower output and lower costs
A perfectly competitive market results in efficiency because
A. Price rises high enough to equal marginal cost. B. MC < P. C. Price is driven down to minimum ATC. D. Zero economic profit is achieved.