The observation that the money supply is procyclical and leading the level of aggregate economic theory is most closely associated with

If asset A is a risky asset yielding 10 percent and asset B is a riskless asset with the same maturity with a yield of 8 percent, investors would

A) prefer asset A. B) prefer asset B. C) be indifferent between the two assets. D) None of the above.

Refer to Figure 10.9. Other things equal, a decrease in the nominal money supply by the Fed is best represented as a change in equilibrium from

A) point A to point B. B) point A to point D. C) point C to point B. D) point C to point D.