If the demand for loanable funds shifts right, then
a. the real interest rate and the equilibrium quantity of loanable funds both fall.
b. the real interest rate falls and the equilibrium quantity of loanable funds rises.
c. the real interest rate and the equilibrium quantity of loanable funds both rise.
d. the real interest rate rises and the equilibrium quantify of loanable funds falls.
c
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
If the price of watermelons is 5 pesos in Argentina and the exchange rate is 4 pesos per dollar, then what is the dollar price of watermelons?
A) $0.75 B) $0.80 C) $1.25 D) $2.00
Judy Carl has been eyeing for weeks a Prada handbag (made in Milan, Italy) in the store window at Neiman-Marcus. She is willing to pay $250 for it (a birthday gift for herself, she rationalizes) if the price ever came down to that. Well, she is in luck! It goes on sale for $200, down from $325 . She rushes in to make the purchase. She not only gets the handbag, but also a consumer surplus of
a. $125 b. $50 c. $200 d. $75 e. $375
In Figure 13-3, according to economic theory, the kink in the demand curve will occur at point
A. E. B. A. C. C. D. D.