The real balance effect (wealth effect), the interest rate effect, and the net exports effect all help to explain the:
A. decrease in supply in the loanable funds market.
B. large federal budget deficit.
C. increase in short-run aggregate supply.
D. downward-sloping aggregate demand curve.
Answer: D
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Which of the following raise the incentive for households to save?
a. means-testing of government benefits and inheritance taxes b. means-testing of government benefits but not inheritance taxes c. inheritance taxes, but not means-testing of government benefits d. neither means-testing of government benefits nor inheritance taxes
If a $10 billion increase in government purchases causes a $25 billion increase in real GDP, then the expenditures multiplier is
A. unknown. B. 2.5. C. 10. D. 5.
Goods that are used for the production of other goods are referred to as:
A) consumer durable goods. B) consumer capital. C) physical capital. D) public goods.
If the players in the figure shown act in their own self-interest, then we know that Adidas will earn:
A. $2 million.
B. $8 million.
C. $6 million.
D. $10 million.