Suppose the probability of a near-new car being good is 0.4 while its probability of being a lemon is 0.6 . If risk-neutral consumers are willing to pay $14,000 if the car is in good condition and $8,000 if it is a lemon, a risk averse buyer who knows those probabilities would be willing to pay $10,400 for the car

When part of the quantity of money is held in currency, then

A) a currency drain occurs. B) there is a higher level of excess reserves. C) the money multiplier will increase in value. D) the Fed will find it beneficial to increase the discount rate.

In the graph showing aggregate demand and aggregate supply after a negative supply shock, we can see that high energy prices in the late 1970s caused ______.

a. a leftward shift in the aggregate demand curve
b. a rightward shift in the aggregate demand curve
c. a leftward shift in the short-run aggregate supply curve
d. a rightward shift in the short-run aggregate supply curve