An increase in all of the following will increase aggregate demand EXCEPT
D) government spending.
If there is a decrease in foreign demand for U.S.goods due to a recession in Europe
A) the U.S. aggregate demand curve will shift right.
B) the U.S. aggregate demand curve will shift left.
C) the U.S. aggregate demand curve will not be affected.
D) the U.S. aggregate demand curve will become steeper.
The opportunity cost of holding money is measured by
A) short-term nominal interest rate.
B) short-term real interest rate.
C) long-term nominal interest rate.
D) long-term real interest rate.
How does an increase in the short-term interest rate affect peoples' desire to hold real money balances?
A) People will hold more money to compensate for the higher interest rate.
B) People will hold more money in anticipation of higher inflation.
C) People will hold less money since they would be sacrificing more interest by holding money.
D) People will hold less money since it is not worth as much.