Other things equal, a decrease in the Z factors ________ the equilibrium interest rate and ________ equilibrium output.
A. decreases; decreases
B. increases; increases
C. increases; decreases
D. decreases; increases
Answer: D
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If the government ran a major budget deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. Laffer curve effect. b. structural deficit. c. crowding-out. d. monetary policy ineffectiveness.
If an automobile manufacturer pays $200 for a car windshield, $400 for four car tires, $100 for a car radio, and sells cars made with these parts for $20,000, then each car the automobile manufacturer sells contributes how much to GDP?
A. $20,200 B. $19,300 C. $20,000 D. $20,700
Explain the difference between American and European options.
What will be an ideal response?
Monetary policy is not the only type of policy that affects interest rates.
Answer the following statement true (T) or false (F)