A fall in the rate of people's time preference in general tends to
A) increase interest rates.
B) decrease interest rates.
C) have no effect on interest rates.
D) have no effect at all in the market for credit.
B
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Robert got a new job and relocated to a different city. He initially decided to rent a small apartment close to his office
However, he decided to live in a much bigger and costlier apartment when he found out that his employer will pay him a house rent allowance. This is an example of ________. A) adverse selection B) moral hazard C) the prisoners' dilemma D) the free-rider problem
Someone who is deemed irrational from an economic standpoint is someone who
a. voluntarily partakes in actions contrary to his personal preferences. b. voluntarily partakes in actions contrary to what society deems acceptable. c. voluntarily partakes in actions that the majority of consumers would not. d. sets prices at ninety-nine cents.
Which of the following represents a long-run adjustment?
A. A farmer uses an extra dose of fertilizer on his corn crop. B. Unable to meet foreign competition, a U.S. watch manufacturer sells one of its branch plants. C. A steel manufacturer cuts back on its purchases of coke and iron ore. D. A supermarket hires four additional clerks.
Use the standard IS-LM-FE framework and assume the country begins at a triple intersection. Show using the graph and explain in words the effect that an increase in the country's money supply will have on domestic interest rates, output levels, and the official settlements balance (before we consider the implications of pressure on the country's exchange rate).
What will be an ideal response?