If the Fed unexpectedly decreases the money supply, real GDP
a. increases because the resulting increase in the interest rate leads to a decrease in investment.
b. increases because the resulting decrease in the interest rate leads to an increase in investment.
c. decreases because the resulting increase in the interest rate leads to a decrease in investment.
d. decreases because the resulting increase in the interest rate leads to an increase in investment.
e. decreases because the resulting decrease in the interest rate leads to an increase in investment.
C
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If an economy is producing a level of output which is higher than the equilibrium level, planned expenditures ________ total output and ________ goods and services are being produced than are being demanded
A) exceed; more B) exceed; fewer C) are less than; fewer D) are less than; more
The term "crowding out" relates to the decrease in
A) consumption expenditure from an increase in investment. B) the real interest rate from a government budget deficit. C) private investment from a government budget deficit. D) saving from an increase in disposable income.
If citizens are not very mobile among governments _____
a. there is no intergovernmental competition b. intergovernmental competition is ineffective c. intergovernmental competition is effective because individuals can compare their government with nearby governments d. the urban sprawl will be lessened
The opportunity cost of holding money is measured by the:
a. interest rate b. liquidity lost by holding money. c. money supply curve. d. inflation rate. e. cost of cashing in financial assets.