The model of supply and demand leads to the prediction that high interest rates cause:
A. a decrease in both housing prices and the number of homes purchased.
B. a decrease in the price of housing and an increase in the number of homes purchased.
C. an increase in the price of housing and a decrease in the number of homes purchased.
D. an increase in both housing prices and the number of homes purchased.
Answer: A
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Savers are willing to lend out money because:
A) they prefer to spend money in the future rather than today. B) the rate of inflation in an economy is normally positive. C) of altruism. D) the rate of inflation in an economy is normally negative.
The difference between Gross National Product and Net National Product is the
a. rate of inflation. b. statistical discrepancy encountered in calculating GDP. c. difference between real versus nominal GDP. d. depreciation of the economy's capital stock.
Deadweight losses represent the
a. inefficiency that taxes create. b. shift in benefit from producers to consumers. c. part of consumer and producer surplus that is now revenue to the government. d. increase in revenue to the government.
Increased government spending is an example of:
A. expansionary monetary policy. B. contractionary monetary policy. C. contractionary fiscal policy. D. expansionary fiscal policy.