During the financial crisis of 2008-2009, the U.S. government bailed out Lehman Brothers.

The figure above shows a monopolistically competitive firm in the short run. During the transition to the long run, the demand curve will shift ________ and the MR curve will shift ________

A) leftward; leftward B) leftward; rightward C) rightward; leftward D) rightward; rightward

Suppose present interest rates are relatively high. Financial investors will hold

A) smaller speculative balances because they expect bond prices to fall further. B) larger speculative balances because they expect bond prices to fall further. C) smaller speculative balances because they do not expect bond prices to fall further. D) larger speculative balances because they do not expect bond prices to fall further.