Exhibit 1-7 the Slope of the Straight Line in Exhibit

question 69

Multiple Choice

Exhibit 1-7 The slope of the straight line in Exhibit 1-7 is

• A)greater at point a than at point b
• B)the same at points a and b
• C)zero because the line is straight
• D)negative because an inverse relation is shown
• E)positive because the line lies to the right of the y-axis

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Definitions:

Liquidity Preference

The desire of consumers and businesses to hold onto cash or easily convertible assets rather than making long-term investments or transactions.

Supply and Demand

The fundamental economic model for price determination in a market, describing the relationship between the quantity of a good that producers wish to sell at various prices and the quantity that consumers wish to buy.

Interest-Rate Effect

The interest-rate effect describes how changes in the central bank's interest rate influence the level of overall spending in the economy by affecting borrowing costs.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy.