In the Short Run

question 20

Multiple Choice

In the short run

• A) the interest rate can rise when the domestic money supply falls.
• B) the interest rate can decrease when the domestic money supply falls.
• C) the interest rate stays constant when the domestic money supply falls.
• D) the interest rate rises in the same proportion as the domestic money supply falls.
• E) the interest rate never rises when the domestic money supply falls.

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Definitions:

Laissez-Faire Capitalism

is an economic system where transactions between private parties are free from government intervention, such as regulations, privileges, tariffs, and subsidies.

Economic Functions

Concern the roles and operations of an economy, including production, distribution, and consumption of goods and services among individuals and organizations.

Private Property

A legal designation for the ownership of property by non-governmental legal entities.