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November 29, 2014

November 29, 2014

Posted by **youngcity** on Tuesday, December 16, 2008 at 9:12pm.

The most important reason for the slope of the aggregate demand curve is that as the price level _______.

1) increases, interest rates decrease, and investment increases

2) decreases, interest rates decrease, and investment decreases

3) increases, interest rates increase, and investment decreases

4) decreases, interest rates increase, and investment increases

2

When there is an adverse supply shock _______.

1) unemployment rises and the short-run Phillips curve shifts left

2) unemployment falls and the short-run Phillips curve shifts left

3) unemployment rises and the short-run Phillips curve shifts right

4) unemployment falls and the short-run Phillips curve shifts right

3

Suppose a bank has a 10 percent reserve requirement, $4,000 in deposits, and has loaned out all it can given the reserve requirement.

1) It has $400 in reserves and $3,600 in loans.

2) It has $40 in reserves and $3,960 in loans.

3) It has $800 in reserves and $3,200 in loans.

4) It has $444 in reserves and $3,556 in loans.

4

Whitney puts money in a savings account at her bank earning 3.5%. One year later she takes her money out and notes that while her money was earning interest, prices rose 1.5%. Whitney earned a nominal interest rate of _______.

1) 3.5% and a real interest rate of 5%

2) 5% and a real interest rate of 2%

3) 5% and a real interest rate of 3.5%

4) 3.5% and a real interest rate of 2%

- macroeconomics -
**economyst**, Wednesday, December 17, 2008 at 9:16amDo a little research, then take a shot.

Hints 1) interest rates and investments move is opposite directions.

2)http://en.wikipedia.org/wiki/Phillips_curve

3) 10% of 4000 is 400.

4) Nominal interest rate is equal to the real rate plus inflation.

**Answer this Question**

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