If The Central bank tries to keep the interest rate constant when the economy is operating on the steep part of the AS curve, _________ will occur?

Related Mcqs:

Money that a government has required has required to be accepted in settlement of debts is ?

A. barter money B. currency value C. legal tender D. commodity money...

The interest rate ?

A. is determined in the goods market and influences the level of planned investment and thus the money market B. is determined in the money market and influences the level of planned investment and thus the goods market C. is determined in the goods market and has no influences on the money market D. is … The interest rate ?Read More...

When real income increases other things equal we can expect the demand for real money holdings to ?

A. fall B. not change C. increase D. None of these...

Suppose the State Bank purchases a Rs 1,000 government bond from you. If you deposit the entire Rs 1,000 in you bank what is the total potential change in the money supply as a result of the State Bank’s action if the your bank’s reserve ratio is 20 percent ?

A. Rs 4,000 B. Rs 5,000 C. Rs 1,000 D. Rs 0...

The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

A. Transactions motive B. precautionary motive C. profit motive D. speculation motive...