Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by
A) a price decrease, decreasing the supply and increasing the demand.
B) a price increase, increasing the quantity supplied and decreasing the quantity demanded.
C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.
D) a price increase, increasing the supply and decreasing the demand.
B
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As part of the "wealth channel of monetary policy," a higher money supply __________ bond prices and thus __________ spending
A) raises; raises consumption B) raises; raises investment C) lowers; lowers consumption D) lowers; lowers investment
In the United States, the purchasing power of money is determined by:
a. the underlying precious metals that back each unit of currency. b. the value of U.S. treasury bonds that back each unit of currency. c. its acceptability. d. Congress, which controls the money supply.