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
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
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.
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%
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