If the Demand Function for Money Is M/P = 0

question 73

Multiple Choice

If the demand function for money is M/P = 0.5Y - 100r and if M/P increases by 100, then the LM curve for any given interest rate shifts to the:

• A) left by 100.
• B) left by 200.
• C) right by 100.
• D) right by 200.

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Definitions:

Equity Theory

A concept in social psychology that assesses the fairness of an individual's situation by comparing their input and outcome ratio to those of others.

Input-Outcome Ratio

A concept in equity theory referring to the balance between an individual's contributions to and the rewards they receive from their work or relationship.

Positive Reinforcement Technique

A behavior modification strategy that involves rewarding desirable behaviors to increase the likelihood of their recurrence.

Intrinsic Motivation

The drive to perform an activity for its own sake and personal rewards, rather than for some external reward or pressure.