According to the theory of liquidity preference, if the interest rate rises
a. people want to hold more money. This response is shown by moving to the right along the money demand curve.
b. people want to hold more money. This response is shown by shifting the money demand curve right.
c. people want to hold less money. This response is shown by moving to the left along the money demand curve.
d. people want to hold less money. This response is shown by shifting the money demand curve left.
c
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The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market?
A) There is excess supply at the equilibrium price of $7. B) The government has selected the appropriate price for pizzas. C) The quantity supplied equals the quantity demanded. D) Supply equals demand.
A firm that is maximizing its profits will keep renting machines up to the point where:
a. the marginal productivity of a capital is maximized. b. the marginal value product of machines is maximized. c. the marginal value product of machines is equal to the market rental rate for machines. d. the machine's market rental rate is minimized.