Author Question: If the real interest rate increases, there is A) an upward shift of the consumption function. B) ... (Read 45 times)

jace · **on:** Jun 29, 2018

If the real interest rate increases, there is

A) an upward shift of the consumption function.
B) a movement downward along consumption function.
C) a change in the slope of the consumption function.
D) a movement upward along the consumption function.
E) a downward shift of the consumption function.

Question 2

Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is 1 trillion. At any interest rate above 4 percent,

A) less than 1 trillion will be demanded and bond prices will fall.
B) more than 1 trillion will be supplied and bond prices will fall.
C) there is a shortage of money and the interest rate will rise.
D) more than 1 trillion will be supplied and the interest rate will rise.
E) less than 1 trillion will be demanded and bond prices will increase.