The short-run effects on the interest rate are
a. shown equally well using either liquidity preference theory or classical theory.
b. best shown using classical theory.
c. best shown using liquidity preference theory.
d. not shown well by either liquidity preference theory or classical theory.
c
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If consumers save the entire amount of the increase in their disposable income due to a tax cut, the ________
A) tax cut will lead to a decrease in GDP B) tax cut will lead to an increase in GDP C) tax cut will lead to an increase in current account deficit D) tax cut will have no effect on GDP
The above figure shows the short run cost curves for a typical firm in a competitive market. If price = 4, then the firm
A) is earning positive profits. B) should produce 35 units. C) should shut down. D) None of above.