If real income rises 3 percent, price rises by 5 percent, nominal money demand rises by 7 percent, what is the income elasticity of real money demand (assuming nominal interest rate does not change)? A. less than or equal to 0.2 B. greater than 0.2 and less than or equal to 0.3 C. greater than 0.3 and less than or equal to 0.4 D. greater than 0.4 and less than or equal to 0.5 E. greater than 0.5 2. If the inflation rate is 8% and the real money demand grows at 2%, what is the nominal money supply growth? A. less than or equal to 5% B. greater than 5% and less than or equal to 7% C. greater than 7% and less than or equal to 9% D. greater than 9% and less than or equal to 11% E. greater than 11% 3. Which of the following statements correctly describes the IS-LM model? A. The FE curve is upward sloping B. The IS curve is upward sloping C. The LM curve is upward sloping D. None of the above
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- If real income rises 3 percent, price rises by 5 percent, nominal money demand rises by 7 percent, what is the income elasticity of real money demand (assuming nominal interest rate does not change)?
A. less than or equal to 0.2
B. greater than 0.2 and less than or equal to 0.3
C. greater than 0.3 and less than or equal to 0.4
D. greater than 0.4 and less than or equal to 0.5
E. greater than 0.5
2. If the inflation rate is 8% and the real money demand grows at 2%, what is the nominal money supply growth?
A. less than or equal to 5%
B. greater than 5% and less than or equal to 7%
C. greater than 7% and less than or equal to 9%
D. greater than 9% and less than or equal to 11%
E. greater than 11%
3. Which of the following statements correctly describes the IS-LM model?
A. The FE curve is upward sloping
B. The IS curve is upward sloping
C. The LM curve is upward sloping
D. None of the above
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