In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if the interest rate rises?
A) There is a movement to a point such as b on supply of loanable funds curve SLF0.
B) The supply of loanable funds curve shifts rightward to a curve such as SLF2.
C) The supply of loanable funds curve shifts leftward to a curve such as SLF1.
D) none of the above
A
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The real business cycle model begins with the assumption that ________
A) wages and prices are sticky B) wages and prices are completely flexible C) the velocity of money is a constant D) nominal variables are superior to real variables in describing economic activity
One disadvantage of corporations is the double taxation of income to the owners
a. True b. False Indicate whether the statement is true or false
Which of the following was the result of the Federal Reserve's purchase of mortgage-backed securities in 2009?
a. MBS interest rates declined, home mortgage rates declined, and the Fed turned a profit on these operations. b. MBS interest rates declined, home mortgage rates declined, but the Fed had a loss on these operations. c. MBS interest rates increased, home mortgage rates declined, and the Fed turned a profit on these operations d. MBS interest rates increased, home mortgage rates increased, but the Fed had a loss on these operations
Keynes believed that prices and wages were rigid or fixed until the economy reaches ______.
a. equilibrium b. full employment c. recession d. expansion