If the Demand Function for Money Is M / P

question 47

Multiple Choice

If the demand function for money is M / P = 0.5Y - 100r, then the slope of the LM curve is:

• A)0.001.
• B)0.005.
• C)0.01.
• D)0.05.

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Definitions:

Saving

The act of not spending a portion of income and setting it aside for future use, often in a deposit account or as an investment.

Deficits

The situation that arises when a government, company, or individual spends more money than it receives in income or revenue over a specified period.

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Tax Cuts

Reductions in the amount of tax that individuals or corporations must pay to the government.