In which case(s) does(do) a country's supply of loanable funds shift left?
a. both an increase in the budget deficit and capital flight
b. an increase in the budget deficit, but not capital flight
c. capital flight, but not an increase in the budget deficit
d. neither an increase in the budget deficit nor capital flight
b
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
The primary difference between private goods and public goods is that
A. private goods are consumed by private individuals whereas public goods are not consumed by private individuals. B. private goods often yield externalities but public goods do not. C. property rights can be assigned to public goods but not to private goods. D. public goods are nonrivalrous in consumption whereas private goods are rivalrous in consumption.
All other things held constant, premiums on options will increase when the
A) exercise price increases. B) volatility of the underlying asset increases. C) term to maturity decreases. D) futures price increases.
Figure 6.4 represents a perfectly competitive firm's costs. Illustrate the firm's short-run supply curve on the graph. Explain.
What will be an ideal response?