In the above figure, if the interest rate is 3 percent per year, the quantity of money demanded is
A) greater than the quantity of money supplied, and the demand for money curve will shift.
B) greater than the quantity of money supplied, and the supply of money curve will shift.
C) less than the quantity of money supplied, and the demand for money curve will shift.
D) greater than the quantity of money supplied, and the interest rate will change.
E) less than the quantity of money supplied, and the interest rate will change.
D
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Refer to the above figure. Which variable is autonomous with respect to real GDP?
A) real consumption spending B) the sum of real consumption and real saving C) real saving D) real investment spending
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model? a. The reserves account becomes more positive (or less negative) and monetary base
falls. b. The reserves account becomes more negative (or less positive) and monetary base rises. c. The reserves account and monetary base remain the same. d. The reserves account becomes more negative (or less positive) and monetary base remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.