HW9Answers - Chapter 24 ECON 135, Summer 2008 p. 1 Name:_...

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Chapter 24 ECON 135, Summer 2008 p. 1 Name:________________ I. Multiple Choice 1. Assume that the Cambridge k equals 0.2. If income is equal to $100,000, the transactions demand for money is equal to ___. A. $100,000 B. $500,000 C. $120,000 D. $20,000 2. For an individual LM curve, the money supply is assumed to __. A. grow at a rate equal to the interest rate B. be constant C. grow at a rate equal to the growth rate in income D. grow at a rate equal to the marginal propensity to consume 3. Which of the following will cause the LM curve to shift to the left? A. a decrease in the money supply B. a decrease in investment C. a decrease in money demand D. an increase in velocity 4. Which of the following is an equilibrium condition for the goods market? A. money demand = money supply B. MV = PT C. desired expenditure = total production D. IS = LM 5. The less the marginal propensity to consume, the ___.
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HW9Answers - Chapter 24 ECON 135, Summer 2008 p. 1 Name:_...

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