In the classical theory of the employment an increase in the rate of interest will ______ savings and ________ investment.
Fill in the blank(s) with the appropriate word(s).
increase; decrease
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Countries that use the euro as their currency face similar concerns as countries did during the years of the gold standard in that each are (were)
A) using a floating currency. B) unable to conduct fiscal policy. C) unable to conduct monetary policy. D) using currency which is backed by gold.
Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise. Holding everything else constant, how would this affect the market for corn (a substitute for wheat)?
A) The supply of corn would decrease and the equilibrium price of corn would increase. B) The demand for corn would increase and the equilibrium price of corn would increase. C) The demand for corn would increase and the equilibrium price of corn would decrease. D) The demand for corn would decrease because consumers could afford to buy less wheat and corn.
Assume that a particular state has decided to outlaw the sharing of individuals' credit histories as an illegal invasion of privacy. As a result of this action we would expect the
A) cost of borrowing money to rise. B) number of loans to unworthy credit risks to rise. C) problems of asymmetric information to become more severe. D) all of the above E) none of the above
Domestic savings:
A. is equal to domestic income minus consumption spending. B. comes from private households spending less than they earn. C. occurs when government revenues exceed noncapital expenditures. D. All of these are true.