Changes in the equilibrium interest rate will:
A. affect both the size of the domestic output and the allocation of capital goods among
industries.
B. affect the size of the domestic output, but not the allocation of capital goods among
industries.
C. affect the allocation of capital goods among industries, but not the size of the domestic
output.
D. have no perceptible effect on either the size of the domestic output or the allocation of
capital goods among industries.
Answer: A
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Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?
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