The demand for loanable funds slopes
A) downward because NPV falls as interest rates fall.
B) downward because NPV falls as interest rates rise.
C) downward because NPV falls as money enters the economy.
D) upward because at higher interest rates people are more willing to save.
E) upward because at higher interest rates the stock market is a less attractive investment.
B
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When a recession ends,
A) the household sector decreases spending substantially. B) interest rates decrease. C) households decrease spending on durable goods. D) firms increase the amount of borrowing.
The sum of the coins and currencies in the bank's vault and its deposit in the Fed is called:
a. vault cash. b. transaction deposits. c. legal reserves. d. required reserves. e. loanable funds.
Gross domestic product is
a. the market value of all goods and services exchanged within a country during a time period. b. the market value of all domestic assets, regardless of whether they are owned by citizens or foreigners. c. the compensation received during a period for labor services plus interest, rents, and corporate profits. d. the market value of final goods and services produced within a country during a time period.
Briefly explain why two firms could both be made better off by cooperating, but they fail to cooperate.
What will be an ideal response?