The LM curve describes the relationship between interest rates and GDP for which the supply of money is equal to the demand for real balances, holding _____ constant.
A) expectations
B) tastes and preferences
C) the quantity of money
D) expectations, tastes, and the quantity of money
Ans: C) the quantity of money
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When economists say the quantity supplied of a product has decreased, they mean the:
a. supply curve has shifted to the left. b. supply curve has shifted to the right. c. price of the product has risen, and consequently, suppliers are producing more of it. d. price of the product has fallen, and consequently, suppliers are producing less of it.
When indifference curves are bowed in toward the origin,
a. consumers are less inclined to trade away goods they are lacking. b. consumers' willingness to trade away goods they have in abundance diminishes. c. an increase in income will shift the indifference curve away from the origin. d. a decrease in income will shift the indifference curve toward the origin.