A decrease in the money supply:
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP.
b. lowers the interest rate, causing a decrease in investment and an increase in GDP.
c. raises the interest rate, causing an increase in investment and a decrease in GDP.
d. raises the interest rate, causing an increase in investment and an increase in GDP.
e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
e
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The price elasticity of demand for a commodity is determined primarily by the
a. size of the consumer surplus. b. attractiveness of the substitutes for the good. c. incomes of consumers. d. availability of complementary goods.
We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will increase when
A. supply decreases and at the same time demand increases. B. supply and demand decreases simultaneously. C. supply and demand increases simultaneously. D. supply increases and demand increases simultaneously.