According to the theory of liquidity preference, the money supply
a. and money demand are positively related to the interest rate.
b. and money demand are negatively related to the interest rate.
c. is negatively related to the interest rate while money demand is positively related to the interest rate.
d. is independent of the interest rate, while money demand is negatively related to the interest rate.
Ans: d. is independent of the interest rate, while money demand is negatively related to the interest rate.
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Colonists supporting the American Revolution (1775–1781)
(a) were well-prepared and well-organized. (b) comprised at least two-thirds of the total colonial population. (c) faced lower transportation and communication costs than the British during the war. (d) were able to tax the colonists to finance the war.
"Assume that all individuals have perfect information about prices now and in the future, that they have identical tastes, that all markets are competitive, and that there is no government." This statement is indicative of how economists
a. apply the law of supply and demand. b. employ marginal analysis. c. are prevented from getting correct answers. d. abstract for analytic purposes. e. use realistic assumptions to develop theory.