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If the quantity of money demanded is $100 billion and the quantity of money supplied is $200 billion, then the interest rateIf a checking account has an interest rate of 1% and a Treasury bill has an interest rate of 3%, the opportunity cost of holdThe introduction of ATMs: Select one: 0 a. did not change the demand for cash, as ATMs do not affect public spending habits.The European Central Bank was established: Select one: 0 a. in 1999, when the euro was adopted. O b. during the French RevoluDeflation leads to winners and losers; for example: Select one: 0 a. bond and stock holders lose, but the brokerage company gWhich of the following could lead to moderate inflation? Select one: O a. a negative supply shock O b. the pursuit of a balanAn increase in the expected rate of inflation: Select one: O a. shifts the short-run Phillips curve down. O b. moves the econThe difference between real GDP and potential GDP is known as the: Select one: O O a. unemployment gap. b. budget deficit. OWho gains when there is unexpected deflation? Select one: 0 a. borrowers O b. real-asset owners, borrowers, and lenders O c.

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Answer #1

Due to presence of HOMEWORKLIB POLICY, I am answering first question.

1.

Ans: c. fall.

Explanation:

Since quantity of money demanded is less than quantity of money supplied, we have following situation:

With current rate being higher than equilibrium rate, people will invest money and purchase more bonds due to which their return (interest) will fall. The excess demand of bonds will result in fall in interest rate in the market.

Equilibrium rate = i*

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