(Interest Rate, Planned investment in billions): (3%,$400) (6%,$360), (9%, $320), (12%, $280), (15%, $240), (18%, $200): Suppose the expenditure multiplier is 4. A drop in the interest rate from 15% to 9%, ceteris paribus, would increase equilibrium output by $________ billion.
A) 320
B) 20
C) 240
D) 160
Answer: A) 320
You might also like to view...
The net-export effect of expansionary monetary policy is a(n)
A) depreciation of the value of the dollar and the decrease of U.S. net exports. B) appreciation of the value of the dollar and the increase of U.S. net exports. C) appreciation of the value of the dollar and the decrease of U.S. net exports. D) depreciation of the value of the dollar and the increase of U.S. net exports.
A leftward shift of the demand curve will lead to a(n)
A) decrease in equilibrium price. B) excess supply at the old equilibrium price. C) decrease in quantity supplied. D) All of the above.
An increase in nonlabor income while holding the wage rate constant
A. rotates the budget line in along the leisure axis. B. rotates the budget line in along the consumption axis. C. rotates the budget line out along the leisure axis. D. rotates the budget line out along the consumption axis. E. shifts the budget line up while maintaining the same slope.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.