In the Figure Given Below Panel a Represents Money Market

question 30

Multiple Choice

In the figure given below panel A represents money market equilibrium, panel B represents investment demand, and panel C represents equilibrium real GDP.
Figure 13.3

-Refer to Figure 13.3. When this economy is in equilibrium:

• A) investment spending is equal to $800 billion.
• B) the interest rate is equal to 4 percent.
• C) there is an excess demand for money.
• D) the price level will equal $5.
• E) real GDP will equal $500 billion.

---

Definitions:

Discrimination Gradient

The degree to which an organism can differentiate between two stimuli, indicating the sensitivity of its perceptual systems.

Knee Jerk Response

A rapid automatic reaction to a stimulus, often used metaphorically to describe an immediate but unthinking reaction.

Literal "Knee Jerk Response"

A reflexive action of the leg kicking outward when the knee is tapped, used metaphorically to describe an immediate and unthinking response.

Anticipation

The action of expecting or predicting something based on current knowledge or instincts.