If Y=C+I+G but Md< Ms, then
a. interest rates must rise and output must fall.
b. both interest rates and output must fall.
c. interest rates must fall and output must rise.
d. both interest rates and output must rise.
e. none of the above.
C
You might also like to view...
Adam Smith’s book, one of the first systematic treatments of economics, was entitled
A. The Plan of the Ages. B. The General Theory of Money, Taxes, and Income. C. The Wealth of Nations. D. Principles of Economics. E. Concepts in Moral Philosophy.
Effective protection will be greater if, all else equal,
a. imported inputs are a small percentage of the final product b. tariffs on imported inputs are high c. tariffs on the final product are low d. quotas are added to tariffs on imported inputs e. none of the above
Consider the two graphs above. Suppose rising fuel costs makes it more expensive to move goods to and from warehouses. This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
The production possibilities frontier will shift if there is a change in
a. technology b. unemployment c. product prices d. society's preferences for commodities e. the quantities of the two goods being produced