In a Two-Asset Economy with Money and T-Bills, the Quantity

question 40

Multiple Choice

In a two-asset economy with money and T-bills, the quantity of money that people will want to hold, other things being equal, can be expected to:

• A) increase as the real GDP interest rate increases.
• B) decrease as the real GDP interest rate increases.
• C) decrease as real GDP increases.
• D) none of the above.

---

Definitions:

Marginal Revenue

The additional income received from selling one more unit of a good or service.

Demand Curve

A graphical representation demonstrating the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Short Run

A period in economic analysis where some factors of production are fixed and cannot be changed.

Market Demand

The aggregate amount of a product or service that every consumer in a market is prepared and capable of buying at different price levels.