If consumers reduced their spending, what would happen to the interest rate and investment?
The interest rate would fall so investment would rise.
You might also like to view...
A country that borrows more from the rest of the world than it lends to it in a year is called a ________, and a country that lends more to the rest of the world than it borrows from it in a year is called a ________
A) borrower; lender B) importer; exporter C) net borrower; net lender D) gross borrower; gross lender
An unregulated paint factory that pollutes a river results in ______ and _____
A. overproduction; a price that exceeds the marginal benefit from the good B. underproduction; a price that equals the marginal benefit from the good C. the efficient quantity produced; a marginal benefit equal to the mar-ginal social cost D. an inefficient quantity produced; a marginal benefit below the mar-ginal social cost
Unemployment insurance
a. reduces the hardship of unemployment, but it also increases the amount of unemployment. b. reduces the incentive for the unemployed to find and take new jobs. c. causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment. d. All of the above are correct.
Aluminum Aces dumps wastewater into a creek they have owned for decades. The new neighbor, Ms. Franklin, has tried to grow bamboo along the creek where it enters her property, but the wastewater kills about $1,000 worth of her bamboo each year. She offers Aluminum Aces $600 per year to add a new filter, which costs $400, to their system so wastewater will no longer kill her bamboo. Which of the following is true of this situation and necessary for it to fit the Coase theorem?
a. Neither party is worse off than before. b. Property rights are not defined. c. A positive externality is internalized. d. Transaction costs are high.