According to the intertemporal substitution effect, a fall in the price level will
A) decrease the real value of wealth, which increases the quantity of real GDP demanded.
B) cause the interest rate to fall so that investment increases and the quantity of real GDP demanded increases.
C) increase net exports, which causes the quantity of real GDP demanded to increase.
D) increase the real value of wealth, which raises the interest rate so that the quantity of real GDP demanded decreases.
B
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Which of the following statements is true of British colonies in Jamaica and Barbados?
A) Production was based on well-defined property rights and private ownership of resources. B) The institutions set up in colonies in Jamaica and Barbados were mostly inclusive. C) Participation of the natives in politics was greatly limited. D) The colonies were similar to the ones set up in North America.
Production efficiency implies that
A) joint profits are maximized. B) joint profits are minimized. C) joint profits are zero. D) joint profits can be increased.
To earn the greatest possible profit, a firm must:
A. maximize revenue less cost. B. minimize revenue less cost. C. maximize quantity at any price. D. maximize price at any quantity.
As the term "opportunity cost" is defined in the text, the opportunity cost of going to college includes
a. both tuition and the value of the student's time. b. tuition but not the value of the student's time, which is a cash cost. c. the value of the student's time but not tuition, which is a monetary cost. d. neither tuition nor the value of the student's time, since obtaining a college degree makes one's income higher in the future. e. neither tuition nor the value of the student's time, at least at subsidized state universities.