Assume That the Money Demand Function Is (M/P)d = 2,200

question 13

Multiple Choice

Assume that the money demand function is (M/P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000 and the price level P is 2. If the price level is fixed and the supply of money is raised to 2,800, then the equilibrium interest rate will:

• A)drop by 4 percent.
• B)drop by 2 percent.
• C)drop by 1 percent.
• D)remain unchanged.

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Definitions:

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues, as well as promoting secondary sexual characteristics such as increased muscle and bone mass, and the growth of body hair.

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Scapegoating

Displacing aggression onto members of minority groups or other innocent targets not responsible for the frustrating situation.

Frustration-Aggression Hypothesis

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