A point to the left of the LM curve would represent a situation in which
A) money demand is greater than money supply.
B) money supply is greater than money demand.
C) money demand is greater than goods demand.
D) money demand is less than goods demand.
B
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If in a market the last unit of output was sold at a price higher than marginal cost,
A) producers are better off producing more. B) consumers are better off if less of the product is sold. C) social welfare is not maximized. D) the unit increased total profit.
When the relative price of a good increases, consumers respond by buying
a. a larger quantity of that good and a larger quantity of substitutes for that good. b. a larger quantity of that good and a smaller quantity of substitutes for that good. c. a smaller quantity of that good and a larger quantity of substitutes for that good. d. a smaller quantity of that good and a smaller quantity of substitutes for that good.