Which of the following would be most likely to prompt businesses to make planned inventory investment?
a. reports of rising imports
b. an announced reduction in interest rates
c. soaring production levels
d. reports of rising unemployment
b. an announced reduction in interest rates
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If there are no changes in inflation expectations, a fall in the federal funds rate:
A) increases both the long-run nominal interest rate and the long-run expected interest rate. B) decreases the long-run nominal interest rate and increases the long-run expected interest rate. C) decreases both the long-run nominal interest rate and the long-run expected interest rate. D) increases the long-run nominal interest rate and decreases the long-run expected interest rate.
According to the BEA, in the second quarter of 2012 business spending on equipment and software rose by 4.7 percent. Using the expenditure approach, this change increases
A) gross private domestic investment. B) government expenditure on goods and services. C) net exports of goods and services. D) personal consumption expenditures.
In 2003, the federal budget deficit was about _____ percent of gross domestic product
a. three b. zero c. seven d. ten
Which one of the following is an area of continued disagreement among modern macroeconomists with regard to the use of fiscal policy?
What will be an ideal response?