If the Nominal Interest Rate Is Less Than the Equilibrium

question 43

Multiple Choice

If the nominal interest rate is less than the equilibrium nominal interest rate determined in the money market, then households and firms

• A) are holding more money than they prefer.
• B) are holding less money than they prefer.
• C) expect the nominal interest rate to decrease.
• D) expect the price level to increase.
• E) expect real GDP to increase.

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Definitions:

LED Display

A flat panel display that uses light-emitting diodes as pixels for a video display, common in consumer electronics and advertisement boards.

Logic

The system or principles underlying the arrangement and operation of a computer or complex electronic device focusing on conditional operations and decision-making.

BCD Value

Binary-Coded Decimal representation, a method of storing numbers where each digit is represented by its own binary sequence, commonly used in digital systems.

Thumbwheel Switch

A mechanical input device used to input numerical data, often found in industrial control systems, allowing the user to rotate a wheel to select numbers.