Higher interest rates caused by an increase in the price level creates:
A. an indirect negative relationship between the price level and investment spending.
B. an indirect positive relationship between the price level and investment spending.
C. the incentive for firms to invest more in new factories.
D. the incentive for individuals to spend more on consumption goods.
A. an indirect negative relationship between the price level and investment spending.
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If the Fed fears a recession, it
A) decreases aggregate supply. B) buys government securities. C) sells government securities. D) decreases the quantity of money. E) decreases aggregate demand.
Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and net export spending is $2 million. What is GDP?
A) $15 million B) $23 million C) $25 million D) $27 million
In order to compare benefits today with future costs, we need to know:
A. the interest rate. B. the rate of inflation. C. the uncertainty associated with future benefits and costs. D. All of these statements are true.
Human capital is associated with
a. a doctor charging lower-income patients less b. a doctor paying rent for the office c. a doctor's stethoscope d. a doctor's knowledge of political events e. a doctor's skills in the operating room