A higher nominal interest rate ________ the profit-maximizing level of MPK for firms, leading firms to a ________ capital-output ratio, thus ________ net investment
A) raises, higher, raising
B) raises, lower, lowering
C) lowers, higher, raising
D) lowers, higher, lowering
E) lowers, lower, raising
B
You might also like to view...
If government expenditures are increased by $50 billion, assuming all other factors stay constant, we would expect the initial impact of the increased spending to cause real GDP to
A. increase by $50 billion. B. stay constant. C. increase by less than $50 billion. D. increase by more than $50 billion.
Switzerland provides a counterexample to the claim
A) nations are poor because they are subject to exploitation by nations with superior military power. B) the rule of law is necessary for economic growth. C) military power is the source of the wealth of a nation. D) central economic planning doesn't work.
Refer to Table 2-7. The Shellfish Shack produces only shrimp and oysters. The table above shows the maximum possible output combinations of the two types of shellfish using all resources and currently available technology
a. Suppose The Shellfish Shack is currently producing at point E. What is the opportunity cost of producing an additional 11,000 pounds of oysters? b. Suppose The Shellfish Shack is currently producing at point E. What happens to the opportunity cost of producing more and more shrimp? Does it increase, decrease, or remain constant? Explain your answer. c. Suppose The Shellfish Shack is currently producing at point B. What happens to the opportunity cost of producing more and more oysters? Does it increase, decrease, or remain constant? Explain your answer. d. Suppose The Shellfish Shack is plagued by a disease which destroys oyster beds but not shrimp habitats. What would happen to its PPF?
In the short-run macro model, which of the following increases when government spending increases?
a. The interest rate b. Investment spending c. Taxes d. Spending on consumer durables e. The money supply