The income and substitution effects move in ________ for lenders and in ________ for borrowers

In the short run, the nominal interest rate is affected by changes in the money supply perceived to be temporary, but once ___ adjust(s), the nominal interest rate ___ in the long run.

a. the supply of money; rises b. the price level; will revert to its former level c. expectations of interest rates; falls d. real GDP; does not change

Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the

A) United States must borrow an amount equal to national saving. B) United States must borrow an amount equal to imports minus exports. C) rest of the world may or may not finance the U.S. trade deficit. D) United States must borrow an amount equal to consumption expenditure plus investment.