In general, when people talk about investing, they mean that they:
A. hold stocks or bonds.
B. have lent their money to someone who will use it to buy physical capital.
C. have put money in the stock market.
D. All of these statements are true.
Answer: D
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In the short run, when the Fed raises the federal funds rate,
A) the real interest rate is unchanged so investment and consumption expenditure are not changed. B) the real interest rate temporarily falls, thereby increasing investment and consumption expenditure. C) the real interest rate temporarily increases, thereby decreasing investment and increasing consumption expenditure. D) the real interest rate temporarily increases, thereby decreasing investment and consumption expenditure. E) investment and consumption expenditure increase, thereby raising the real interest rate temporarily.
Which of the following will limit the money creation process to an amount less than the potential amount?
a. bank pursuit of profits b. increase in currency holdings by the public c. business demand for loans d. increased use of credit cards
Which of the following is not a variable in the index of leading indicators?
A. average work week B. duration of unemployment C. unemployment claims D. new building permits
Table 21.4Output (Units per Day)Total Cost (Dollars per Day)016130242358478At 3 units of output in Table 21.4, average fixed costs are
A. $16.00. B. $15.50. C. $19.50. D. $5.33.