If political influences, independent of any economic forces, lead to a larger government budget deficit, what will be the effect on the loanable funds market?
a. The interest rate will rise and the amount of saving will increase.
b. The interest rate will fall and the amount of saving will increase.
c. The interest rate will rise and the amount of saving will decrease.
d. The interest rate will fall and the amount of saving will decrease.
e. The interest rate will rise but the change in saving will be ambiguous.
A
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Which of the following statements is true of the scientific method?
A) The scientific method may not reveal a "true" model of the world. B) The scientific method does not require the models to be tested with data. C) The scientific method used by economists and scientists is independent of empiricism. D) The scientific method can help develop accurate models even when data are unavailable.
Who gains and who loses from rent controls?
What will be an ideal response?
Suppose that the Anytown city government asks private citizens to donate money to support the town's annual holiday lighting display. Assuming that the citizens of Anytown enjoy the lighting display, the request for donations suggests that:
A. the display creates negative externalities. B. government should tax the producers of holiday lighting. C. resources are currently overallocated to the provision of holiday lighting in Anytown. D. resources are currently underallocated to the provision of holiday lighting in Anytown.
Compared with money, bonds have
A. more risk and less liquidity. B. more risk and more liquidity. C. less risk and more liquidity. D. less risk and less liquidity.