MacroQuiz21

MacroQuiz21 - Before you take Quiz for Chapter 21 go...

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Before you take Quiz for Chapter 21 go through all the topics mentioned below: 1. Keynes's liquidity preference theory of the interest rate suggests that the interest rate is determined by: (Hint: interest rate is determined by the supply and demand for money; See the Definition of Theory of Liquidity Preference on the Page 475). 2. When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, an increase in the interest rate: (Hint:Increase in interest rate will decrease the quantity demanded of money; read fourth sentence of the first paragraph on the Page 477). 3.When the supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis, an increase in the price level: (Hint:shifts money demand to the right and increase the interest rate; See FIGURE 2 and read everything from the figure 2 on the Page 479). 4. For the United States, the most important source of the downward slope of the aggregate-demand curve is: (Hint: First Sentence with Etalic Letters on the Page 475). 5.In the market for real output, the initial effect of an increase in the money supply is to: (Hint:Fourth
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This note was uploaded on 10/22/2011 for the course ACCT 3551 taught by Professor Brown during the Spring '11 term at UNC.

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MacroQuiz21 - Before you take Quiz for Chapter 21 go...

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