Other things the same, a higher real interest rate raises the quantity of
a. domestic investment.
b. net capital outflow.
c. loanable funds demanded.
d. loanable funds supplied.
Answer: d. loanable funds supplied.
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Open-access resources tend to be
a. conserved b. taxed c. overused d. efficiently used e. used in an environmentally sound manner
If a bank lends funds in the form of cash, then:
a. M2 stays the same, but M1 rises. b. M1 and M2 fall. c. M1 and M2 do not change. d. M2 rises, and M1 falls. e. M1 and M2 rise.
The signaling aspect of the market system refer to
A. legal requirements for contracts and exchanges. B. the voluntary character of the exchange. C. transaction costs of carrying out exchanges. D. the price of the good to the consumer and producer.
When the price level rises and the money wage rate does not change,
A) the quantity of potential GDP increases because the quantity of real GDP supplied increases. B) the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change. C) existing businesses do not change their level of output. D) profits fall and more businesses fail. E) the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.