Holding nominal money balances constant, a decrease in the price level
A) causes the real value of the money balances to increase, thereby increasing the interest rate.
B) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures.
C) causes the real value of the money balances to increase, in turn increasing total planned real expenditures.
D) causes the real value of the money balances to decrease, in turn decreasing total planned real expenditures.
C
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An information cascade occurs when:
A) the buyer of a good has more information than the seller and takes hidden actions. B) the seller of a good has more information about the hidden characteristics of the good. C) people make the same decisions as others without focusing on private information. D) people have contradictory information about a good they want to consume.
The demand curve for labor is also
A) the supply curve for the output labor is used to produce. B) the demand curve for the output produced with labor since the demand for labor is a derived demand. C) the marginal product of labor curve. D) the marginal revenue product of labor curve.