Changes in net worth and liquidity may significantly affect the volume of lending and economic activity according to the
A) interest rate channel.
B) balance sheet channel.
C) money channel.
D) bank lending channel.
B
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A fall in prices of imported resources will cause aggregate:
a. Demand to increase b. Demand to decrease c. Supply to decrease d. Supply to increase
The price of furniture in the United States began to fall in the late 1990s while other prices in the economy rose primarily because
A. employment in the U.S. furniture industry rose significantly. B. the United States had placed high tariffs on imported furniture. C. there were technological advances in the production of furniture. D. furniture imports to the United States began to rise dramatically.
A point on a total variable cost curve shows the ________ variable cost a firm will bear to produce a certain output.
A. lowest B. change in C. highest D. average
Assume that all taxes are lump-sum, net exports = 0, and the marginal propensity to consume is 0.8. Then, if investment and taxes were each to fall by $100 million, the equilibrium level of income would
A) rise by $100 million. B) fall by $100 million. C) rise by $500 million. D) fall by $500 million.