If the Asset Market Is to Remain in Equilibrium,then If

question 37

Multiple Choice

If the asset market is to remain in equilibrium,then if the money supply increases,output is unchanged,the price level is unchanged,and the expected inflation rate is unchanged,then

• A)the real interest rate must rise.
• B)the real interest rate must decline.
• C)the nominal interest rate must rise.
• D)the inflation rate must rise.

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Definitions:

Modus Ponens

A logical form of argument where, from two premises, one asserts a condition and the other affirms that condition, leading to a conclusion.

Hypothetical

Pertaining to a proposition or statement whose truth depends on conditions or variables not yet specified.

Pure Hypothetical

A proposition or scenario that is entirely based on conjecture or speculation, without any necessity for it to have real-world applicability.

Antecedent

The conditional clause in a hypothetical proposition, usually following a "if" structure, whose truth is posited to logically imply another clause.