An increase in the interest rate, other things equal, would
What will be an ideal response?
Reduce the amount invested because the opportunity costs of investing would be higher
You might also like to view...
Which of the following is the most likely to be a variable factor of production at a university?
A. The size of the student union. B. The size of the football stadium. C. The location of the university. D. The number of librarians.
From the perspective of the classical model, many economists would say that the most important automatic stabilizer is
a. taxes b. imports c. interest rates d. transfer payments e. passage of time
The change in aggregate demand that results from fiscal expansion changing the interest rate is called the
a. multiplier effect. b. crowding-out effect. c. accelerator effect. d. Ricardian equivalence effect.
Exhibit 2-9 Production possibilities curve
Which of the following moves from one point to another in Exhibit 2-9 would represent an increase in economic efficiency?
A. Z to W. B. W to Y. C. W to X. D. X to Y.