When the nominal interest rate is____ the equilibrium interest rate, the quanity of money demanded is...
If expected inflation is constant, then when the nominal interest rate falls, the real interest rate O A. falls by more than the change in the nominal interest rate. falls by the change in the nominal interest rate. Oc rises by the change in the nominal interest rate. OD.rises by more than the change in the nominal interest rate. QUESTION 15 According to liquidity preference theory, if there were a surplus of money, then O A. the interest rate would...
For an imaginary economy, when the real interest rate is 7 percent, the quantity of loanable funds demanded is $500 and the quantity of loanable funds supplied is $500. Currently, the nominal interest rate is 9 percent and the inflation rate is 4 percent. Currently, A. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will rise. B. the quantity of loanable funds supplied exceeds the quantity of...
12. A market is said to be in equilibrium when: A Quantity demanded equals quantity supplied B. Production costs equal revenues from sale of the output C. The number of sellers equals the number of buyers D. People's needs are fully met 13. At the equilibrium prices: A. There are shortages but no surpluses B. There are surpluses but no shortages C. The economic problem of scarcity is no longer relevant D. There are no shortages or surpluses 14. An...
1. The money demand equation used by the Keynesians has as its premise that as interest rates fall, money demand A. Stays the same B. Increases C. Decreases D. Flucuates 2. What is the present value of $500 to be paid in 2 years if the interest rate is 5 percent? A. $453.51 B. $500.00 C. $476.25 D. $550.00 3. A decrease in interest rates after a bond is initially sold results in the YTM being ___ than the coupon...
QUESTION 5 The idea that inflation is caused by too much money chasing too few goods means that o a there is a surplus of money sapplod relative to theb quanity suppled is less than quantity supplied exceeds o e quantity dermanded c the economy is beset d quanitity of money demanded quantity demanded by surpluses is too high
the If the interest rate in the loanable funds market is currently below the equilibrium level, then the quantity of funds demanded is quantity of funds supplied, and we can expect the interest rate to over time. less than: decrease O greater than: increase greater than: decrease less than: increase
Assume that the following data characterize the hypothetical economy of Trance: money supply = $210 billion; quantity of money demanded for transactions = $150 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the interest rate. Instructions: Enter your answers as whole numbers. a. What is the equilibrium interest rate in Trance? b. At the equilibrium interest rate, what are the quantity of money supplied, the total quantity of...
When the real rate of interest is less than the nominal rate of interest, then: A. inflation must be added to the nominal rate. B. investment returns do not increase purchasing power. C. nominal flows should be discounted with real rates. D. inflation is expected to occur.
20. A surplus exists when quantity supplied is less than quantity demanded. at the market clearing price. when quantity supplied exceeds the quantity demanded. any time the market is out of equilibrium.
In market equilibrium, at the equilibrium price and equilibrium quantity, O A. both the quantity demanded equals the quantity supplied and demand equals supply O B. demand is not greater than supply O C. demand equals supply O D. the quantity demanded equals the quantity supplied and equals the quantity bought and sold