As the nominal interest rate increases ________.
A) it becomes more costly to hold money instead of bonds
B) the quantity of money demanded falls
C) the opportunity cost of holding money rises
D) all of the above
E) none of the above
Question 2
A consumer is a borrower if
A) optimum current consumption is less than current disposable income.
B) optimum current consumption is greater than current disposable income.
C) future disposable income is greater than current disposable income.
D) the consumer's indifference curves are relatively steep.
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