Using the liquidity preference framework, show what happens to interest rates during a business cycle recession
What will be an ideal response?
During a business cycle recession, income will fall. This causes the money demand curve to shift to the left. The resulting equilibrium will be at a lower interest rate.
Economics
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Financial intermediation is best defined as the process by which
A) corporations issue new stock. B) liabilities are liquidated. C) financial institutions accept savings from savers and make loans to investors. D) inflation is controlled.
Economics
Which of the following is NOT a "flow" variable?
A) government debt B) consumption expenditure C) labor services D) income
Economics