When the Federal Reserve increases interest rates, investment spending ________ and GDP ________.
A. increases; decreases
B. increases; increases
C. decreases; decreases
D. decreases; increases
Answer: C
You might also like to view...
Efficiency losses are
A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price. B) the total loss in consumer surplus from a tariff. C) the increase in producer surplus that is created by a tariff. D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.
Suppose, at a given federal funds rate, there is an excess supply of reserves in the federal funds market
If the Fed wants the federal funds rate to stay at that level, then it should undertake an open market ________ of bonds, everything else held constant. If the Fed does nothing, however, the federal funds rate will ________. A) sale; increase B) purchase; increase C) sale; decrease D) purchase; decrease
Which of the following is considered a service in the calculation of GDP?
A. Manufacturing automobiles. B. Tax preparation. C. Constructing new homes. D. Manufacturing reclining chairs.
China has a comparative advantage in textiles and an absolute advantage in both textiles and radios. Japan has a comparative advantage in radios. According to this scenario
A. China should export textiles and import radios. B. Japan should import both radios and textiles. C. China should export both radios and textiles. D. Japan should export textiles and import radios.