Other things constant, an increase in the real interest rate will
a. cause consumers to reduce their purchases of durable items like appliances and automobiles.
b. induce businesses to increase their level of investment.
c. make borrowing money more attractive.
d. increase the natural rate of unemployment.
A
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One reason the total sum of the income categories does not equal GDP is that
A) taxes are generally larger than subsidies and the depreciation of capital is negligible. B) GDP values goods and services at retail prices and the income approach values them at wholesale cost. C) people do not spend all their income, so the value of consumption expenditure is less than the value of wages. D) GDP does not include depreciation, which is part of the income categories. E) GDP values goods and services at market prices and the income approach values them at factor cost.
Keynes argued that the downward slope of the demand for money curve depends on the:
A. equation of exchange. B. rate of interest. C. federal funds rate. D. discount rate.
At the output rate at which diminishing marginal product begins, a firm will experience
A. increasing marginal costs. B. constant average total costs. C. increasing average fixed costs. D. decreasing average variable costs.
Which of the following is an example of a positive statement?
A. Cats are better pets than dogs. B. NCAA Football should have adopted a playoff system 10 years ago. C. An increase in minimum wage results in higher teenage unemployment. D. No one should be allowed to carry guns into the classroom.