In a "liquidity trap,"
A) the demand for money is infinite.
B) the LM curve is a vertical line.
C) the nominal interest rate on short-term assets is relatively high.
D) money supply changes have a strong impact on interest rates.
A
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The reason that it is possible for the economy in the above figure to be at equilibrium point E2 rather than at equilibrium point E1 is that
A) in the long run there is always less than full employment. B) in the short run the economy can produce more than it can in a long-run situation. C) AD always shifts rightward and never shifts leftward. D) the economy must be in a recession.
The Five Forces Model illustrates the forces that determine the level of product differentiation and price competition in an industry.
Answer the following statement true (T) or false (F)