If, at some interest rate, the quantity of money demanded is less than the quantity of money supplied, people will desire to
a. sell interest-bearing assets, causing the interest rate to decrease.
b. sell interest-bearing assets, causing the interest rate to increase.
c. buy interest-bearing assets, causing the interest rate to decrease.
d. buy interest-bearing assets, causing the interest rate to increase.
c
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Danita rescues dogs from her local animal shelter. When Danita's income rises by 7 percent, her quantity demanded of dog biscuits increases by 12 percent. For Danita, the income elasticity of demand for dog biscuits is
a. negative, and dog biscuits are a normal good. b. negative, and dog biscuits are an inferior good. c. positive, and dog biscuits are an inferior good. d. positive, and dog biscuits are a normal good.
Use the following diagram to answer the next question.
Based on this diagram, we can say ________.
A. a contractionary policy is likely to be more effective than an expansionary policy B. the Fed is pursuing a contractionary monetary policy C. the Fed is pursuing an expansionary monetary policy D. an expansionary policy is likely to be more effect than a contractionary policy