Describe what happens to nominal and real interest rates, investment and aggregate demand when money supply shifts right or left, other things equal. When money demand shifts right or left
Whenever nominal interest rates increase in the money market, for given inflationary expectations, it will also increase real interest rates and decrease investment and aggregate demand. That would happen with either a decrease in the money supply curve or an increase in the money demand curve.
Whenever nominal interest rates decrease in the money market, for given inflationary expectations, it will also decrease real interest rates and increase investment and aggregate demand. That would happen with either an increase in the money supply curve or a decrease in the money demand curve.
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In the Keynesian world a rising real money supply causes GDP to __________ by __________ the real interest rate which causes a(n) __________ in investment
A) increase; increasing; increase B) increase; decreasing; increase C) decrease; increasing; increase D) decrease; increasing; decrease
When a firm experiences declining long-run average total costs as it produces more output, it is known as a(n)
A) oligopoly. B) rent seeker. C) natural monopoly. D) monopolistic competitor.