In some financial situations, people have a tendency to hold on to their money. Which of the following are the accurate coordinates for this type of situation?
a. i2 moves down and M2 moves to the left
b. i1 moves up and M2 moves to the left
c. i2 moves up and M1 moves to the left
d. i2 moves down and M1 moves to the right
d. i2 moves down and M1 moves to the right
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Consider the market for credit. When the supply of credit increases while the demand for credit remains unchanged,
A) the interest rate will decrease and the amount of credit provided in the market will increase. B) the interest rate will increase and the amount of credit provided in the market will increase. C) the interest rate will decrease and the amount of credit provided in the market will decrease. D) the interest rate will increase and the amount of credit provided in the market will decrease.
The LM curve will become steeper when
a. there is a larger money demand increase per unit increase in income. b. money demand is less sensitive to the interest rate. c. money demand is more sensitive to the interest rate. d. Both a and b e. Both a and c