Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to ________ and shifts the IS curve ________
A) increase; down and to the left
B) increase; up and to the right
C) decrease; down and to the left
D) decrease; up and to the right
B
You might also like to view...
Which of the following statements is true?
A) If households expect higher taxes in the future, they will decrease their current savings rate. B) The savings rate of households is dependent only on current consumption expenditure. C) The savings rate of households is dependent only on consumption expenditure planned for the future. D) If households expect higher taxes in the future, they will increase their current savings rate.
Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, trade makes both countries better off because in each country
A) total employment is greater. B) total welfare is greater. C) total consumption of goods is greater. D) wages are higher.
For a profit-maximizing monopolist, the price of a product is: a. always equal to marginal revenue
b. always greater than marginal revenue. c. always less than marginal revenue. d. always equal to the average total cost of production.
Using Figure 1.3 and PP1, at point A,
A. There is inefficient use of available resources. B. An increase in the production of mops would definitely require a decrease in the production of brooms. C. All available resources are being used efficiently. D. The available technology keeps production inside PP1.