A decrease in income ________
A) lowers money demand for any given interest rate
B) lowers interest rates ceteris paribus
C) leads to a leftward shift of the money demand curve
D) all of the above
E) none of the above
D
You might also like to view...
Data shows that United States college students purchase more e-books than German college students. Assuming that all students have identical preferences for e-books and textbooks, what is the likely explanation for this result?
A) Taxes on textbooks are higher in the United States than taxes on textbooks in Germany. B) Taxes on textbooks are lower in the United States than taxes on textbooks in Germany. C) The price of textbooks is cheaper in the United States than textbooks in Germany. D) Both A and C.
According to the quantity theory of money, if an economy produces 100 units of output and has a money supply equal to $500, then if the money supply doubles while velocity remains unchanged, the new price level will
a. fall to $2.50 b. fall to $5.00 c. increase to $5.00 d. increase to $10.00 e. fall to $1.00