An Increase in Wealth

question 60

Multiple Choice

An increase in wealth

• A)increases real money demand and the real interest rate,and shifts the LM curve up.
• B)decreases real money demand and the real interest rate,and shifts the LM curve down.
• C)increases real money demand and the real interest rate,but does not shift the LM curve.
• D)decreases real money demand and the real interest rate,but does not shift the LM curve down.

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Definitions:

Resources

Inputs or assets used in the production of goods and services, including labor, capital, and natural materials.

Absolute Advantage

The advantage in the production of a good enjoyed by one country over another when it uses fewer resources to produce that good than the other country does.

Resources

The inputs or factors of production, including land, labor, capital, and entrepreneurship, that are used in the creation of goods and services.

Demand

The volume of commodities or services people are inclined and financially capable of purchasing at various price points during a designated time.