"Because the nominal interest rate is the opportunity cost of holding money, the supply curve of money slopes downward." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is incorrect. Because the nominal interest rate is the opportunity cost of holding money, the demand for money curve slopes downward but the supply curve of money does not slope downward.
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What is the loanable funds market? What happens if the real interest rate in the market is held above the equilibrium interest rate?
What will be an ideal response?
Economics: a. is a natural science like biology and chemistry
b. is a science built on survey data and declared preferences (what people say they are going to do) not on revealed preferences (how people actually behave). c. is a science concerned with reaching generalizations about human behavior, not unlike sociology or psychology. d. is concerned with predicting business conditions in the future, not with the current state of the stock market.