The combined effect on the loanable funds market of a new technology that increases the marginal physical product of capital and a shift in consumers' expectation of future prices, now expecting they will be lower than they earlier expected, is a(n)
a. increase in the interest rate
b. decrease in the interest rate
c. decrease in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change
d. increase in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change
e. shift in the demand curve to the left and the supply curve of loanable funds to the right
D
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Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."
What will be an ideal response?
Consumer surplus in a market can be represented by the
a. area below the demand curve and above the price. b. distance from the demand curve to the horizontal axis. c. distance from the demand curve to the vertical axis. d. area below the demand curve and above the horizontal axis.
A poll conducted by a national firm finds that most Americans say they care more about safety when buying a car than about fuel efficiency. As a result, a car maker produces a car with many safety features, but it doesn't sell well. This behavior
A. contradicts economic theory because it is irrational not to purchase safer cars. B. does not contradict economic theory because economic theory only relates to prices and not to features such as safety. C. contradicts economic theory because the people didn't do what they said they would do. D. does not contradict economic theory because economists focus on what people do rather than on what they say.
If the United States exports $250 billion worth of goods and imports $420 billion worth of goods
A. the balance of payments will be -$170 billion. B. the balance of trade will be $670 billion. C. the official reserve transaction will be $170 billion. D. the balance of trade will be -$170 billion.