Along an LM curve at higher income levels the transactions demand for money is __________, so the interest rate must be __________ to equate the demand to the fixed supply of money

Suppose there is an increase in the supply of a good. Which of the following statements is true?

A. The closer the demand curve is to being vertical, the larger the decrease in equilibrium price, and the smaller the increase in equilibrium quantity. B. The closer the demand curve is to being horizontal, the larger the decrease in equilibrium price, and the smaller the increase in equilibrium quantity. C. The closer the demand curve is to being vertical, the smaller the decrease in equilibrium price, and the larger the increase in equilibrium quantity. D. The closer the demand curve is to being vertical, the larger the increase in equilibrium price, and the smaller the decrease in equilibrium quantity.

A government policy that would raise the rate of productivity growth is

A. reducing the government budget surplus. B. taxing expenditures on research and development. C. improving human capital development. D. shifting infrastructure expenditures to the private sector.