An increase in interest rates will generally lead to a(n) ____ in present investment and a(n) ____ in future income and production
a. decrease, decrease
b. decrease, increase
c. increase, decrease
d. increase, increase
a
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The primary source of funds for the World Bank is
A) the world's wealthiest countries. B) the New York Stock Exchange. C) private financial markets. D) quota subscriptions.
Suppose that a bank begins with $500 million in deposits and $100 million in reserves and is just meeting its desired reserve ratio. Now suppose a decrease in the required reserve ratio lowers the desired reserve ratio to 10 percent
After the fall in the desired reserve ratio but before the bank makes any changes, the bank's excess reserves are A) 0. B) $400 million. C) $450 million. D) $50 million.
On paper, the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System
A) less; less B) less; more C) more; less D) more; more
Suppose the economy is in a long-run equilibrium when a temporary, favorable aggregate supply shock occurs. On the graphs above, show what happens to bring the economy back to long-run equilibrium, assuming that there is no policy response
In words, explain why "no response" is the best policy.