Opportunity cost can always be measured in money terms.

Suppose the Fed increases the money supply. Which of the following is true?

A) At the original interest rate, the quantity of money demanded is less than the quantity of money supplied. B) At the original interest rate, the quantity of money demanded is equal to the quantity of money supplied. C) The interest rate must rise for the money market to clear. D) At the original interest rate, the quantity of money demanded is greater than the quantity of money supplied.

Evidence suggests that a liquidity trap is possible when

A) real interest rates are at zero. B) real interest rates are at or just above zero. C) nominal interest rates are at zero. D) nominal interest rates are at or just above zero.