Assume that investment does not depend on the interest rate. A reduction in government spending will cause which of the following for this economy?
A) no change in the interest rate
B) no change in output
C) no change in investment
D) an increase in investment
E) none of the above
E
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During the year, suppose a country's total purchases of newly produced capital goods is $2,000 billion, issues $1,600 billion of stock certificates, and has $500 billion in depreciation. Gross investment in this country equals
A) $2,500 billion. B) $2,000 billion. C) $2,100 billion. D) $4,100 billion. E) $3,600 billion.
When the aggregate demand curve and the short-run aggregate supply curve intersect,
A) the economy is in short-run macroeconomic equilibrium. B) inflation must be increasing. C) structural and frictional unemployment equal zero. D) the long-run aggregate supply curve must also intersect at the same point.
If all the firms producing a good in an industry have market shares that are insignificant, that is, close to zero percent of industry sales,
a. they shut down, that is, go out of business in the long run b. their output levels are close to zero as well c. they are in a perfectly competitive market d. profit is at best zero because cost must be at least greater than zero e. they should advertise
Until the passage of the Airline Deregulation Act of 1978, the Civil Aeronautics Board controlled all of the following except
A. fares. B. assigned routes. C. profits. D. entry into the industry.