In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of a fall in the nominal interest rate?
A) The demand for money curve would shift rightward to MD2.
B) The demand for money curve would shift leftward to MD0.
C) There would be a movement upward along the demand for money curve MD1.
D) There would be a movement downward along the demand for money curve MD1.
D
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Both the long-run and short-run aggregate supply curves will shift when
A) the endowments of the factors of production change. B) the government increases defense spending. C) an event occurs which is expected to last only a short period of time. D) they are both upward sloping.
Rational ignorance suggests that voters will
A) be ignorant about all issues. B) be ignorant about issues that are of no special interest to them. C) pursue information on all issues before voting. D) avoid voting if they have no information.