A change in financial technology that reduces the need to hold cash balances ________ the demand for money and ________ the equilibrium nominal interest rate
A) increases; raises
B) decreases; lowers
C) increases; lowers
D) decreases; raises
E) decreases; does not change
B
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The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her
A) relative cost of coffee in terms of gasoline. B) indifference cost of coffee. C) personal price of coffee. D) marginal rate of substitution.
Which of these statements is a fundamental part of Keyneisan economics?
a. the federal government should have a balanced budget every year to protect economic growth b. the government can use of deficit spending to increase aggregate demand pull the economy out the reccession c. the economy will only reach equilibrium and prosperity through the self regulation of the free market