Holding other factors constant, if growing concerns about job security raise precautionary saving, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. decrease; decrease
B. increase; decrease
C. increase; increase
D. decrease; increase
Answer: D
You might also like to view...
In the long run, a firm is said to be experiencing decreasing returns to scale if a 10 percent increase in inputs results in
A) an increase in output from 100 to 110. B) a decrease in output from 100 to 90. C) an increase in output from 100 to 105. D) a decrease in output from 100 to 85.
How do financial institutions evaluate the creditworthiness of potential borrowers?
A. They do not evaluate creditworthiness because everyone is treated the same. B. They offer high interest rates because only the best borrowers will be able to afford them. C. They do not evaluate the creditworthiness because they know the borrower will honor his/her obligation to repay the loan. D. They gather information regarding the borrowers' finances.
The consumption function shifts upward when
A. households buy more imports. B. saving increases. C. real income increases. D. households' real wealth increases.
In the short run, an increase in the price level causes which of the following: a. A rightward shift in the aggregate demand curve
b. A leftward shift in the short-run aggregate supply curve. c. A rightward shift in the short-run aggregate supply curve. d. A movement upward along the short-run aggregate supply curve.