The U.S. government increases its budget deficit, but at the same time Congress eliminates an investment tax credit. Which of the following is correct?
a. The interest rate will increase; investment may increase or decrease.
b. The interest rate will decrease; investment may increase or decrease.
c. The interest rate may increase or decrease; investment will decrease.
d. The interest rate may increase or decrease; investment will increase.
c
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According to the new growth theory, ________ is the factor that motivates technological change
A) diminishing returns B) random chance C) decisions about how much human capital to acquire D) profit E) the replication of activities
Market equilibrium: i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity.
A) ii only B) iii only C) ii and iii D) i only E) i and ii
If a 1 percent change in income generates a greater than 1 percent change in quantity demanded of boating expenditures, then boating is an:
a. example of Engel's law. b. inferior good. c. income inelastic good. d. income elastic good. e. example of a substitute good.
Frank Knight said that profit
A. is indistinguishable from risk. B. exists when the probability of a given event cannot be predicted reliably. C. can be incorporated into the cost structure of production. D. forces entrepreneurs to make unwise decisions with imperfect information.