People tend to hold more money as
A. the price level rises and interest rates rise.
B. the price level falls and interest rates fall.
C. the price level rises and interest rates fall.
D. the price level falls and interest rates rise.
C. the price level rises and interest rates fall.
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In 2006, the base price of a Hummer SUV was about $30,000. By 2008 as gasoline prices increased,
A) the demand curve for Hummers shifted leftward and Hummer prices decreased. B) the demand curve for Hummers shifted rightward and Hummer prices increased. C) there was a movement down along the Hummer demand curve. D) there was a movement up along the Hummer supply curve.
If investment decreases by $20 billion and the MPC = 0.8, the resulting decrease in the consumption component of AD is: a. $16 billion
b. $4 billion. c. $100 billion. d. $80 billion.