The higher the nominal interest rate:
A. the less money individuals will hold for any given level of transactions and the higher the velocity of money.
B. the less money individuals will hold for any given level of transactions and the lower the velocity of money.
C. the more money individuals will hold for any given level of transactions and the lower the velocity of money.
D. the more money individuals will hold for any given level of transactions and the higher the velocity of money.
Answer: A
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Refer to the diagram. Suppose the budget line shifts so that the consumer's equilibrium changes from point A to point B. This means that the:
A. price of Y has increased.
B. price of Y has decreased.
C. price of X has increased.
D. consumer's money income has increased.
Shifting from production of civilian goods to defense goods during World War II caused
a. a decline in civilian goods prices b. an increase in the demand for civilian goods c. a dramatic increase in the prices of civilian goods d. the government to impose price floors for civilian goods e. the government to impose price ceilings on defense goods