The relationship between the real interest rate and investment is shown by the:
A. investment demand schedule.
B. consumption of fixed capital schedule.
C. saving schedule.
D. aggregate supply curve.
A. investment demand schedule.
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A few years ago, you bought a bond with no expiration and a fixed annual interest payment of $1,000 at a price of $10,000. If the interest rate in the economy is now 12.5% a year and you want to sell the bond, the maximum price that you can get for it is
A. $7,500. B. $12,500. C. $9,750. D. $8,000.
When the Fed raises the legal reserve requirement, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
Fluctuations in employment and output result from changes in
a. aggregate demand only. b. aggregate supply only. c. aggregate demand and aggregate supply. d. neither aggregate demand nor aggregate supply.
Normative economics deals with ____ and positive economics deals with ____.
A. what should be; what is B. fiction; fact C. microeconomics; macroeconomics D. negative aspects; positive aspects