If the real interest rate increases, there is A) an upward ...

[jace]

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.

[mjenn52]

Answer to Question 1

E

Answer to Question 2

E

[jace]

Excellent

[lkanara2]

TYSM