If Income Increased but Money Supply Remained the Same, Which

question 73

Multiple Choice

If income increased but money supply remained the same, which of the following is likely to happen?

• A) There will be an increase in the equilibrium interest rate.
• B) The supply of money will become perfectly elastic.
• C) The level of real money balances will increase.
• D) Both real money balances and the interest rate will remain unchanged.

Recognize the barriers to entry created by monopolies and their implications for competition.

Identify the relationship between monopoly equilibrium, economic efficiency, and social welfare.

Explore the conditions under which monopolies may earn zero economic profits in the long-run equilibrium.

Understand the elasticity of the monopolist’s demand curve and its implications for pricing and revenue.

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Definitions:

Operant Conditioning

A method of teaching in which behavior is altered through the application of rewards or consequences.

B.F. Skinner's View

The perspective of psychologist B.F. Skinner that emphasizes the importance of reinforcement and punishment in shaping behavior, known as behaviorism.

Reinforcement

In behavioral psychology, a concept where a behavior is strengthened or increased by following it with a positive stimulus or removing a negative one.

Overextension

The act of using a word, on the basis of some shared feature, to apply to a broader range of objects than is appropriate.