According to liquidity preference theory, if there were a surplus of money, then
a. the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium.
b. the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium.
c. the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium.
d. the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.
b
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A production possibilities curve is plotted for a nation producing chairs and tables. Which of the following will cause a parallel shift in the production possibilities curve?
A) An intensive training program that increases the productivity of employees engaged in the production of tables B) An intensive training program that increases the productivity of employees engaged in the production of chairs C) An increase in the price of both chairs and tables D) An increase in the availability of raw materials required for the production of both chairs and tables
Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to $2 million. If GDP during that same time period is equal to $23 million, what unplanned changes in inventories occurred?
A) There was an unplanned decrease in inventories equal to $2 million. B) There was an unplanned decrease in inventories equal to $19 million. C) There was an unplanned increase in inventories equal to $2 million. D) There was no unplanned change in inventories.