The Figure Given Below Shows the Interest Rate on the Vertical

question 82

Multiple Choice

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,a decrease in nominal GDP with no change in the price level will cause a movement from:

• A)point B to point A.
• B)point A to point B.
• C)DM to DM'.
• D)DM to DM*.
• E)point E to point F.

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Definitions:

Durable Goods

Consumer goods that have a long life span (over three years) and are used over time, such as cars or appliances.

Farm Products

Goods that are derived from agriculture, including crops and livestock.

Financing Statement

A document filed to give public notice that a lender has a security interest in the collateral offered by a borrower.

Security Interest

A legal claim or lien on collateral that has been pledged, usually to secure repayment of a debt or performance of some other obligation.