Suppose the real interest rate rises and the quantity of loanable funds decreases. These changes could have been the result of
A) firms expecting higher future profits.
B) an increase in disposable income.
C) an increase in household wealth.
D) a decrease in the default risk.
C
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A trade deficit means that net exports are positive
a. True b. False Indicate whether the statement is true or false
The two factors that determine the size of the multiplier are the
A. unemployment rate and the inflation rate. B. marginal propensity to consume and the amount of overseas leakage. C. amount of imports and the amount of exports. D. amount of spending and the number of jobs.
Table 9.1Disposable IncomeTotal Consumption(Billions of dollars per year)(Billions of dollars per year)$0$50200210Which of the following represents the consumption function consistent with the data in Table 9.1?
A. C = $160 billion + 0.91YD. B. C = $50 billion + 0.80YD. C. C = $50 billion + 0.76YD. D. C = $160 billion + 0.80YD.
In order to avoid principal-agent problems, McDonald's uses all but one of the following franchising tactics. Which is the exception?
a. It does not advertise for franchisees. b. Franchisees must put up 40 percent of the investment themselves. c. Franchisees must undergo a preliminary training period, followed by a 12- to 18-month training program. d. Franchisees must already have another fast-food restaurant franchise. e. Franchisees are required to work full-time daily in their restaurant.