When the demand for money increases,
a. The money supply must rise if the Fed is targeting interest rates..
b. The money supply must fall if the Fed is targeting interest rates..
c. Interest rates must rise if the Fed is targeting the money supply.
d. Both a. and c. are correct.
Question 2
Other things remaining equal, total factor productivity will fall if _____.
a. labor input grows more slowly than total output
b. capital input grows faster than total output
c. the economy's output divided by total inputs increases
d. the ratio of total output to the stock of labor and capital changes by zero percent
e. the ratio of total output to the stock of labor and capital increases
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Learn Canadian money grade 1