A Decrease in Confidence in Stocks and Bonds Will Lead
A decrease in confidence in stocks and bonds will lead households to shift their portfolios.As far as the money market is concerned,this development raises money ______ and ______ the equilibrium interest rate.
A) demand; raises
B) demand; lowers
C) supply; raises
D) supply; lowers
At a given interest rate,an increase in the nominal money supply ______ the level of income that is consistent with equilibrium in the market for real balances.
C) does not change
D) may either raise or lower
Changes in monetary policy shift the:
A) LM curve.
B) planned spending curve.
C) money demand curve.
D) IS curve.
The LM curve shows combinations of ______ that are consistent with equilibrium in the market for real money balances:
A) inflation and unemployment
B) the price level and real output
C) the interest rate and the level of income
D) the interest rate and real money balances