If nominal interest rates rise, what will happen to demand for money?
a. It will increase
b. It will decrease.
c. Nothing; the economy will move to a new quantity demanded at a new interest rate.
d. It depends on what happens to other determinants of demand for money like prices or income.
c
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Which of the following best describes how banks create money?
A) Banks charge higher interest rates on loans than they pay on deposits. B) Banks charge fees for providing financial advice. C) Banks make loans from reserves. D) Banks create checking account deposits when making loans from excess reserves.
Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?
A. equilibrium price decreases B. equilibrium quantity increases C. both equilibrium price and quantity increase D. equilibrium quantity decreases E. equilibrium price increases