In Figure 3-3 above, when income is 700, unplanned inventory investment is

Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is $1 trillion. At any interest rate above 4 percent,

A) less than $1 trillion will be demanded and bond prices will fall. B) more than $1 trillion will be supplied and bond prices will fall. C) there is a shortage of money and the interest rate will rise. D) more than $1 trillion will be supplied and the interest rate will rise. E) less than $1 trillion will be demanded and bond prices will increase.

A monopoly, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopoly decrease its price if it wants to increase its output?

What will be an ideal response?