When the nominal interest rate is ________ the equilibrium interest rate, the quantity of money demanded is less than the quantity of money supplied; when the nominal interest rate is ________ the equilibrium interest rate, the quantity of money
demanded exceeds the quantity of money supplied.
A) equal to; less than
B) less than; greater than
C) greater than; equal to
D) equal to; greater than
E) greater than; less than
E
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In the figure above, ceteris paribus, an increase in x is associated with
A) an increase in y. B) a decrease in y. C) an increase in z. D) a random change in z. E) no change in either y or z.
Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly. Therefore, changes in
A. taxes are ineffective in changing aggregate demand. B. government spending affect aggregate demand more quickly than changes in taxes. C. taxes are virtually useless as a stabilization tool. D. government spending should be used with great caution.