Refer to the figure above. Which of the following statements is true when the credit demand curve is CD1 and the credit supply curve is CS1?
A) At all rates of interest above 3% there will be a tendency for real interest rates to fall.
B) At all rates of interest above 4% there will be a tendency for real interest rates to fall.
C) At all rates of interest above 2% there will be a tendency for real interest rates to fall.
D) At all rates of interest above 1% there will be a tendency for real interest rates to fall.
B
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Expenditures on advertising ________
A) can lower average total cost if the advertising increases the quantity sold by a large enough amount B) cannot lower average total cost because when a firm advertises it increases its costs C) always lower average total cost because whenever a firm advertises, it increases the quantity sold D) are variable costs so do not affect the average total cost
Which of the following is true of the interaction of supply and demand?
a. As the price increases, the quantity demanded and the quantity supplied will increase. b. As the price increases, the quantity demanded and the quantity supplied will decrease. c. As the price increases, the quantity demanded increases and the quantity supplied will decrease. d. As the price increases, the quantity demanded will decrease and the quantity supplied will increase. e. As the price increases, neither the quantity demanded nor quantity supplied will change.
Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer
A. argues, that an investment-knowledge cycle exists which requires that investment rates keep increasing or else growth rates will fall, while traditional theory argues that growth rates will not fall, although they will not increase either. B. emphasizes investment rates while traditional theory emphasizes the importance of knowledge as a factor of production. C. argues, that investment is not important in promoting growth, but that the acquisition of knowledge is the sole determinant of economic growth. D. argues that an investment-knowledge cycle allows a once-and-for-all increase in investment to permanently raise a country's growth rate, while traditional theory argues that a once-and-for-all increase in investment leads to a higher standard of living but not to a higher growth rate.
Health savings accounts (HSAs) implemented by the 2003 Medicare law:
A. are only available to those enrolled in Medicare. B. allow workers to accumulate untaxed dollars for payment of qualified medical expenses. C. are criticized because they require workers to "use it or lose it" each year; workers are not allowed to accumulate balances over time. D. can only be used to pay for prescription drugs.