If the Interest Elasticity of Money Demand Is -1/4,by What

question 57

Multiple Choice

If the interest elasticity of money demand is -1/4,by what percent does money demand rise if the nominal interest rate rises from 4% to 5%?

• A)6.25%
• B)0.25%
• C)-0.25%
• D)-6.25%

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Definitions:

Hippocampus

A major component of the brain in humans and other vertebrates, involved in memory formation and spatial navigation.

Frontal Lobe

The part of the brain located at the front of the cerebral cortex, involved in decision making, problem solving, and planning.

Receptor Sites

Specific locations on cell membranes or within cells where chemical substances, like neurotransmitters or hormones, bind to trigger a physiological response.

Long-Term Potentiation

A boost in the potency of synaptic connections after stimulation with high frequencies at a chemical synapse, believed to be a process underlying learning and memory.