Everything else remaining unchanged, what is likely to happen to the credit supply curve of households if:
a. there is a decrease in the real interest rate?
b. households expect a recession in near future?
What will be an ideal response?
a. Everything else remaining unchanged, if there is a decrease in the real interest rate, there will be a downward movement along the credit supply curve of households.
b. Everything else remaining unchanged, if households expect a recession in near future, they will tend to save more today. This will cause the credit supply curve of households to shift to the right.
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Answer the following statement true (T) or false (F)
Suppose that the yen-dollar foreign exchange rate changes from 130 yen per dollar to 140 yen per dollar. Then the yen has
A) depreciated against the dollar, and the dollar has appreciated against the yen. B) depreciated against the dollar, and the dollar has depreciated against the yen. C) appreciated against the dollar, and the dollar has appreciated against the yen. D) appreciated against the dollar, and the dollar has depreciated against the yen.
Economists believe that people's wants are
A) finite. B) infinite. C) irrational. D) unimportant because needs are more important than wants.
A given reduction in government spending will dampen demand-pull inflation by a greater amount when the:
A. Economy's MPS is large B. Economy's aggregate supply curve is flat C. Economy's aggregate supply curve is steep D. Unemployment rate is high