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Question

The money demand function is negatively sloped because

a. the interest rate rises as the general price level falls.

b. the quantity of money demanded rises as transactions demand falls.

c. the quantity of money demanded rises as nominal income falls.

d. the quantity of money demanded rises as the interest rate falls.

e. speculative demand for money rises as the interest rate rises.

An increase in the money supply does all the following except

a. increase aggregate demand.

b. decrease aggregate supply.

c. increase equilibrium income.

d. raise the level of investment.

e. lower interest rates.

An increase in the money supply will

a. decrease both investment spending and aggregate demand.

b. decrease investment spending and increase aggregate demand.

c. decrease both consumption spending and aggregate demand.

d. increase both investment spending and aggregate demand.

e. increase investment spending and decrease aggregate demand.

Answer 1

1 - d

2 - b

3 - d