Looking at the Macroeconomic Statistics for Friedmanland,you Discover That at the Beginning

question 36

Multiple Choice

Looking at the macroeconomic statistics for Friedmanland,you discover that at the beginning of the year,the national money supply was equal to $400 million and by the end of the year it was equal to $420 million.You also found out that the inflation rate in Friedmanland was 7%.In this case,you would expect the LM curve to

• A)shift up as the real money supply falls.
• B)shift up as the real money supply rises.
• C)shift down as the real money supply falls.
• D)shift down as the real money supply rises.

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Definitions:

Sensory Responsiveness

Describes an individual's tendency to react to and process sensory information in a particular way, which can vary widely among different people.

Difference Threshold

The minimum change in stimulation required to detect a difference between two stimuli, also known as the just noticeable difference (JND).

Heavier Objects

Objects with greater mass or weight compared to other items in their comparison set.

Weber's Law

A principle in psychology stating that the change in a stimulus that will be just noticeable is a constant ratio of the original stimulus.