Spending on consumer durables decreases as the interest rate increases.
Answer the following statement true (T) or false (F)
True
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An inferior good has a ________ income elasticity of demand and quantity demanded ________ as income rises
A) negative; increases B) negative; decreases C) positive; increases D) positive; decreases
Economic analysis suggests that countercyclical macro-policy will
a. be difficult to time properly because of uncertainty about the future direction of the economy. b. be difficult to implement because we do not know whether monetary policy is transmitted through the interest rate, or whether it affects aggregate demand directly. c. reduce the natural rate of unemployment when macro-policy is persistently expansionary. d. help reduce economic instability if, and only if, we are willing to tolerate double-digit inflation.
If the price of inputs rises and consumer expectations about future economic activity worsens:
a. Price index rises, and real GDP rises. b. Price index rises, and real GDP falls. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. The change in price index is uncertain, and real GDP falls.
When tax code changes increase investment incentives, the _____ for loanable funds curve shifts to the _____. This results in a(n) _____ in the interest rate and a(n) _____ in investment
Fill in the blank(s) with correct word