If the real interest rate is greater than the nominal interest rate in an economy:
A) inflation must be negative in the economy.
B) inflation must be positive in the economy.
C) inflation must be zero in the economy.
D) the nominal interest rate must be equal to zero.
A
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If the price level rises by 4 percent and workers' money wage rates increase by 2 percent, then the
A) quantity of labor supplied decreases. B) quantity of labor supplied increases. C) quantity of labor supplied does not change because there is no change in the real wage rate. D) the supply curve of labor shifts rightward.
Along an LM curve at lower income levels the transactions demand for money is __________, so the interest rate must be __________ to equate the demand to the fixed supply of money
A) higher; higher B) higher; lower C) lower; higher D) lower; lower