Question 1a) Real money demand is a function that is...

a. increasing in real income and increasing in nominal interest rate

b. increasing in real income and decreasing in nominal interest rate

c. decreasing in real income and decreasing in nominal interest rate

d. increasing in real income and increasing in the inflation rate

e. decreasing in real income and increasing in nominal interest rate

1b) In the 2-sided search model, firms continue posting vacancies until the probability of matching with a worker is equal to

a. the marginal product of labour

b.the ratio of profits from a match to the number of matches

c. the real wage rate

d. the unemployment rate

e. the ratio of the cost of posting a vacancy to the profits from a match