Interest sensitive consumption is negatively impacted by interest rates because when you
A. pay cash for something, the price you really pay depends on the interest rate.
B. buy something on installments (like a car), your payments are positively related to the interest rate, so a higher interest rate would mean a higher payment, and therefore, less interest sensitive consumption.
C. buy something you really need, the price you really pay depends on the interest rate.
D. buy something on installments (like a car), your payments are negatively related to the interest rate, so a higher interest rate would mean a higher payment, and therefore, less interest sensitive consumption.
Answer: B
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The ________ are hurt by importing a good
A) domestic consumers of the good B) domestic producers of the good C) domestic governments D) foreign producers of the good E) foreign governments
Suppose that with international trade now a possibility, two trading nations restructure their production from both having produced clothes and food to one producing clothes and the other producing food. What gains do they experience? What problems may they experience? a. Gains are higher labor productivity and greater total output. Problems may be economic inefficiency
b. Gains are economic efficiency. Problems may be trade wars. c. Gains are people in both nations having higher incomes. Problems may be that the nations cannot find an acceptable trading price between food and clothes. d. Gains are higher labor productivity and greater total output. Problems may arise from dependence on the other for vital goods. e. Gains are economic efficiency. There are no problems as long as they engage in free trade.
Which of the following is an example of a supply shock?
A. a surprise increase of the money supply B. an increase in government spending C. a sharp increase in the price of oil D. an increase in the price level
The short run is best defined as:
A. a period of time sufficiently short that at least one factor of production is fixed. B. one year or less. C. the period of time between quarterly accounting reports. D. a period of time sufficiently short that all factors of production are variable.