A shift in demand toward the foreign country's goods would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy.
A. raise; increase
B. raise; decrease
C. lower; decrease
D. lower; increase
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The interest rate on unsecured loans between banks is called the
A) discount rate. B) repurchase rate. C) T-bill rate. D) federal funds rate.
In the long run in a perfectly competitive industry
A) opportunity costs are negligible. B) economic profits will be zero. C) some firms will be experiencing economic losses. D) only entrepreneurs will earn more than their opportunity costs.
Economic efficiency in a competitive market is achieved when
A) economic surplus is equal to consumer surplus. B) consumers and producers are satisfied. C) the marginal benefit equals the marginal cost from the last unit sold. D) producer surplus equals the total amount firms receive from consumers minus the cost of production.