The relationship between interest rates and investment spending is graphed as
A) a vertical line. B) a horizontal line.
C) an upward sloping curve. D) a downward sloping curve.
D
You might also like to view...
Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 20% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money will, in reality, most likely
A) increase the money supply by more than $1,000. B) increase the money supply by less than $1,000. C) increase the money supply by exactly $1,000. D) increase the money supply by exactly $5,000.
An "unsecured" loan is one
A) with no stated collateral. B) that is pending approval by a bank loan committee. C) which has collateral. D) in which the borrower is delinquent in loan payments but has not formally defaulted on.
Both Jones and Smith agree that the economy is in a recessionary gap. Jones proposes a tax cut and believes that it will raise Real GDP and lower the price level. Smith agrees that a tax cut will raise Real GDP, but he argues that it will not lower the price level in the short run. It follows that
A) both Jones and Smith believe that lower taxes will shift the AD curve rightward, but will not shift the SRAS curve. B) both Jones and Smith believe that lower taxes will shift the SRAS curve rightward, but will not shift the AD curve. C) Jones believes that the tax cut will shift the SRAS curve rightward and the AD curve will not shift. Smith believes that the AD curve will shift rightward and the SRAS curve will not shift. D) Smith believes that the tax cut will shift the SRAS curve rightward and the AD curve will not shift. Jones believes that the AD curve will shift rightward and the SRAS curve will not shift.
The industry elasticity of demand for gadgets is ?2, while the elasticity of demand for an individual gadget manufacturer's product is ?10. Based on the Rothschild approach to measuring market power, we conclude that:
A. there is significant monopoly power in this industry. B. there is no monopoly power in this industry. C. the Herfindahl index for this industry is 5. D. the Herfindahl index for this industry is 0.2.