If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following is true?
A. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
B. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
C. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
D. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
Answer: C
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A straight line falls when moving rightward along it. Hence the slope of the line is
A) negative. B) positive. C) zero because it is a straight line. D) undefined. E) perhaps positive, negative, or zero, but without more information it is impossible to determine.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50The variance in the returns of project D is:
A. 900. B. 1,600. C. 225. D. 0.