If the Nominal Interest Rate Is Above the Equilibrium Level

question 10

Multiple Choice

If the nominal interest rate is above the equilibrium level ________.

• A)the supply of real money balances will fall
• B)the quantity of real money balances people are holding is too low,and is rising
• C)people are selling financial assets in order to increase real money balances
• D)all of the above
• E)none of the above

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Definitions:

Control

In experiments, the standard to which comparisons are made by keeping all variables constant except the one being tested.

Biased

Showing an unfair preference or prejudice for or against something or someone.

Suspend Belief

Temporarily accepting something as true or possible, even if it seems unlikely, often used in the context of fiction.

Conflicts

Situations where incompatible interests, beliefs, or actions lead to opposition between two or more parties.