Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises and GDP Price Index rises.
b. The quantity of real loanable funds per time period falls and GDP Price Index falls.
c. The quantity of real loanable funds per time period rises and GDP Price Index falls.
d. The quantity of real loanable funds per time period and GDP Price Index remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.B
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Refer to Figure 9-3. If there was no quota, how many pounds of peanuts would domestic producers supply?
A) 10 million B) 28 million C) 30 million D) 40 million
In an effort to balance the budget, the government cuts spending rather than increasing taxes. What will happen to the consumption schedule?
a. It will become steeper. b. It will become flatter. c. It will shift upward. d. It will shift downward. e. It will remain the same and move along it.
In Democracy in America, Alexis de Tocqueville argued that
What will be an ideal response?
If a profit-maximizing firm in a perfectly competitive market is currently producing the output where (price - average variable cost) < average fixed cost, the firm is:
A. making a positive economic profit. B. making a zero economic profit. C. suffering an economic loss. D. None of these