Increasing opportunity cost implies that
A) producing additional units of one good results in proportionately smaller reductions in the output of the other good.
B) producing additional units of one good results in increasing amounts of lost output of the other good.
C) the production possibilities frontier will be a straight line.
D) the society will be producing inside its production possibilities frontier.
B
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The demand for money curve slopes downward because a rise in the nominal interest rate ________ the opportunity cost of holding money and therefore ________ the quantity of money demanded
A) decreases; decreases B) increases; decreases C) decreases; increases D) increases; does not change E) increases; increases
Which of the following policies by the Federal Reserve is likely to increase the money supply?
A. Reducing reserve requirements B. Selling government bonds C. Increasing the discount rate D. Increasing interest on reserves