The interest rate effect on aggregate demand indicates that a(n):
A. Decrease in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending
B. Decrease in the price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending
C. Increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending
D. Increase in the supply of money will increase interest rates and decrease interest-sensitive consumption and investment spending
B. Decrease in the price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending
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A ham and cheese sandwich at the local deli costs $4.99 in 2005. If the CPI in 2005 was 90.0 and the CPI today is 121.0, the equivalent price for the ham and cheese sandwich today is
A) $6.71. B) $5.29. C) $4.99. D) $6.04. E) $5.54.
An asset becomes more liquid and hence more money-like
A) as its value relative to other goods approaches zero. B) as its value relative to other goods becomes more uncertain and unpredictable. C) as the cost of exchanging it for other goods approaches zero. D) when it is demanded for its own intrinsic value.