If there is a shortage of loanable funds, then
a. the quantity demanded is greater than the quantity supplied and the interest rate will rise.
b. the quantity demanded is greater than the quantity supplied and the interest rate will fall.
c. the quantity supplied is greater than the quantity demanded and the interest rate will rise.
d. the quantity supplied is greater than the quantity demanded and the interest rate will fall.
a
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Generally, when the Federal Reserve lowers interest rates, investment spending ________ and GDP ________
A) decreases; increases B) increases; decreases C) increases; increases D) decreases; decreases
Classical growth theory predicts that economic growth
A) is merely an illusion. B) will continue at the classical rate of 3 percent forever. C) occurs because of hard-working citizens. D) decreases the supply of labor. E) will eventually stop because of population growth.
Negative output gap indicates that
A) the actual real GDP is above natural real GDP. B) the actual real GDP is below natural real GDP. C) nominal GDP is above real GDP. D) nominal GDP is below real GDP.
When the general price level in our economy increases, the following effects occur except:
A. The purchasing power of people's savings will increase B. The interest rate will also tend to increase C. Foreign buyers will buy less of our output, and we tend to import more D. Our net exports will tend to decrease