A real interest rate that causes the quantity of saving supplied to be equal to the quantity of saving (or investment) demanded is an example of the:
A. principle of comparative advantage.
B. equilibrium principle.
C. principle of increasing opportunity cost.
D. scarcity principle.
Answer: B
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The experience of the United States and other industrialized countries in the 1930s contradicts the classical view of the labor market where the money wage adjusts quickly to maintain full employment. On this issue
a. the Keynesians agree but the monetarists disagree. b. the monetarists agree but the Keynesians do not agree. c. both the Keynesians and monetarists are in agreement. d. neither the Keynesians nor the monetarists agree.
The balance of payments equals
A. the sum of the current account and the financial account. B. the net increase (domestic less foreign) in a country's official reserve assets. C. net investment income from abroad. D. the current account minus net unilateral transfers.
An increase in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield of Treasury bonds, everything else held constant
A) increase; increase B) reduce; reduce C) increase; reduce D) reduce; increase
The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
a. fall on sellers. b. fall on buyers. c. fall equally on both buyers and sellers. d. create a larger deadweight loss (or excess burden).