According to liquidity preference theory, the slope of the money demand curve is explained as follows:
a. Interest rates rise as the Fed reduces the quantity of money demanded.
b. Interest rates fall as the Fed reduces the supply of money.
c. People will want to hold less money as the cost of holding it falls.
d. People will want to hold more money as the cost of holding it falls.
d
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In the foreign exchange market, how does the quantity of U.S. dollars demanded respond to a change in the U.S. exchange rate? Why is there this response?
What will be an ideal response?
Neo-Keynesians believe that the market power exercised by unions, monopolies, and particular resource suppliers created the Phillips curve
Indicate whether the statement is true or false
Use the following graph for a profit-maximizing pure monopoly to answer the next question.
The firm will set its price at
A. 0G. B. 0K. C. 0H. D. 0J.
Katz, Goborg, and Rimmet are oligopolists in the tractor industry. They face intense pressure from foreign tractor imports. Which of the following actions could be considered collusive?
a. Goborg and Rimmet collaborate on a pricing strategy to boost their sales. b. Katz hires lobbyists to convince the government to raise tariffs on imported tractors. c. Rimmet and Goborg each lower their prices after Katz lowers its prices. d. Goborg deliberately lowers its prices to try to steal customers from Rimmet and Katz.