Which of the following will increase the real interest rate?
A) an increase in the supply of loanable funds
B) an increase in household saving
C) an increase in the demand for loanable funds
D) an increase in the budget surplus
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The more human capital you have, the more likely you will:
A. be unemployable. B. earn more money. C. not benefit from specializing. D. All of these are true.
Elasticity of supply tells us
A. How much sellers will increase production in response to a change in price. B. How much producers will increase production with changes in consumers' income. C. How much supply responds to a change in quantity demanded. D. How much sellers will change their price as their quantity supplied changes.
Use a saving-investment diagram to explain what happens to saving, investment, and the real interest rate in each of the following scenarios in a closed economy.(a)In an agricultural economy, great weather this year promises a bumper crop next year, leading citizens to expect higher income next year.(b)Government regulations going into effect next year will reduce the marginal product of capital.(c)The government increases lump-sum taxes on citizens.
What will be an ideal response?