Suppose the government changed the tax laws, with the result that people were encouraged to consume more and save less. Using the loanable funds model, a consequence would be
a. lower interest rates and lower investment.
b. lower interest rates and greater investment.
c. higher interest rates and lower investment.
d. higher interest rates and higher investment.
c
You might also like to view...
Assuming that the marginal utility of wealth diminishes implies that
A) you have more total utility with $100 than with $1,000. B) you have more total utility with $1,000 than with $1,001. C) an additional dollar increases your total utility more if you only have $100 than if you have $1,000. D) an additional dollar does not increase your total utility regardless of your wealth.
Monetary policy is conducted by the U.S. Treasury Department
Indicate whether the statement is true or false
Barter is the direct exchange of goods and services for: a. any kind of money
b. other goods and services. c. either goods or money. d. commodity money. e. foreign currency.
In a consumption schedule, the change in consumption is a constant $12 billion and the change in income is a constant $16 billion across each consumption and income level. It can be concluded that the:
a. Slope of the saving schedule is .33 b. Marginal propensity to save is .25 c. Slope of the consumption schedule is .67 d. Marginal propensity to consume is 1.33