"Public goods" are provided by the public sector as a matter of social choice, not economic necessity

If the proportion of GDP that people choose to hold in the form of money balances is 0.25, then a $100 increase in the money supply will lead to a rightward shift in the LM curve in the amount of

A) $400. B) $ 25. C) $ 75. D) $100.

Under the reasonable dynamic assumptions discussed in the text, a monetary contraction should result in

A) an immediate rise in the interest rate, and no further interest rate changes. B) an immediate rise in the interest rate, and then a fall in the interest rate over time. C) an immediate rise in the interest rate, and then a further rise over time. D) a very gradual but steady rise in the interest rate to its new equilibrium level. E) no change in the interest rate initially, and then a sudden rise to its new equilibrium value.