How is the price level related to nominal money demand?Part 2

A.

They are inversely

related-the

higher the price level, the lower the demand for money.

B.

They are directly

related-the

higher the price level, the higher the demand for money.

C.

They are

unrelated-changes

in the price level have no effect on the demand for money.

Part 3How is the level of real income related to money demand?Part 4

A.

They are directly

related-the

higher the level of real income, the higher the demand for money.

B.

They are inversely

related-the

higher the level of real income, the lower the demand for money.

C.

They are

unrelated-changes

in the level of real income have no effect on the demand for money.

Part 5How is the interest rate on other assets (stocks and bonds for example) related to money demand?Part 6

A.

They are inversely

related-the

higher the interest rate on other assets, the lower the demand for money.

B.

They are directly

related-the

higher the interest rate on other assets, the higher the demand for money.

C.

They are

unrelated-change

in the interest rate on other assets have no effect on the demand for money.

What is the difference between gross investment and net investment? Can gross investment be positive when net investment is negative?Part 2

A.

The difference is equal to depreciated capital; No.

B.

Net investment is the overall increase in the capital stock;Yes.

C.

Gross investment is the overall increase in the capital stock;Yes

D.

Gross investment is the overall increase in the capital stock; No.

In each of the following cases, what is the effect on the IS curve?An increase in the effective tax rate on capital

A.

does not change the IS curve.

B.

shifts the IS curve up and to the right.

C.

shifts the IS curve down and to the left.

Part 2An increase in the money supply

A.

shifts the IS curve up and to the right.

B.

shifts the IS curve down and to the left.

C.

does not change the IS curve.

Part 3A temporary increase in goverment spending

A.

shifts the IS curve down and to the left.

B.

does not change the IS curve.

C.

shifts the IS curve up and to the right.