The opportunity cost of holding money balances increases when:
a. the inflation rate decreases.
b. the interest rate increases.
c. the interest rate decreases.
d. GDP is far from full employment.
b
You might also like to view...
The above figure shows a motel engaged in monopolistic competition with other motels. The equilibrium price at this motel is ________ per room
A) $20 B) $30 C) $40 D) $50 E) $10
Money ________ transaction costs, allowing people to specialize in what they do best
A) reduces B) increases C) enhances D) eliminates
An increase in the supply of labor will, everything else equal,
a. increase the full-employment level of output b. decrease the full-employment level of output c. move the economy from a recession toward full employment d. reduce total employment e. have no impact on total employment
An increase in government spending by $100 would, if the MPC = 0.90, result in an increase in real GDP by:
A. $1,000. B. $9,000. C. $900. D. $190.