Question 1 The slope of the asset demand curve is O vertical, independent of the

Question

Question 1 The slope of the asset demand curve is O vertical, independent of the interest rate. O vertical, independent of nominal GDP downward sloping, inversely related to the interest rate. O downward sloping, inversely related to nominal GDP Question 2 The slope of the money supply is: IS: O horizontal because it is inversely related to the interest rate. O vertical because it is inversely related to the interest rate. O horizontal because the stock of money is determined by the Federal Reserve. O vertical because the stock of money is determined by the Federal Reserve.

Explanation / Answer

1.

The slope of the assets demand curve is downward sloping because Demand for assets is inversely related to the interest rate. This is because when the interest rate increase, then purchasing assets is expensive due to loan will be expensive now.

Hence option third is the correct answer.

2.

The slope of the money supply curve is vertical because the money supply is determined by the Central Bank of the country. Money supply is fixed at a given point in time.

Hence option fourth is the correct answer.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.