A higher interest rate will:
What will be an ideal response?
shift the consumption function downward.
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Investment is a(n) ________ that changes the ________ of capital.
A. stock; flow B. liability; asset C. asset; liability D. flow; stock
The cost of producing each bottle of a certain brand of shampoo is $0.25. If the market for shampoo is monopolistically competitive and demand for shampoo is inelastic, a manufacturer who charges $0.35 for each bottle will ________
A) shut down production in the short run B) exit the industry in the long run C) earn an economic profit of $0.10 per bottle D) earn a total revenue of $0.10 per bottle
Economists who believe that market economies are inherently unstable argue that the crisis of 2008 was primarily the result of
a. the expansionary policies of the Fed that caused the housing boom. b. housing regulations that undermined sound lending practices. c. the leveraged lending practices of banks and the fear that retarded both consumption and investment in the latter half of 2008. d. persistently high interest rates during the decade leading up to the crisis.
Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Refer to the above information. Positive net investment is occurring in:
a) economy A only. b) economy B only. c) economy C only. d) economies A and B only.