When Some Forms of Money Start to Pay Interest,then Along

question 7

Multiple Choice

When some forms of money start to pay interest,then along with a rise in real output it takes a ________ rise in the market interest rate than before to hold the demand for money equal to its supply,which is to say that the LM curve has become ________.

• A)larger,steeper
• B)larger,flatter
• C)smaller,steeper
• D)smaller,flatter

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Definitions:

Economic Condition

The state of a country or region in terms of the production and consumption of goods and services and the supply of money.

Expected Value

The anticipated value for a given investment in the future, taking into account both the probability and the magnitude of all possible outcomes.

Wager Amount

The sum of money staked on the outcome of a bet or gamble.

Subjective Probabilities

Probability estimates based on an individual's personal judgment or opinion rather than on objective data or specific calculations.