Other things equal, when the real interest rate falls, C, I and NX ________ and the output gap will ________
A) decrease; decrease
B) decrease; increase
C) increase; increase
D) increase; decrease
C
You might also like to view...
The possibility that a borrower might engage in riskier behavior after a loan is made is called
A) adverse selection. B) liability aversion. C) moral hazard. D) the risk of default.
An increase in the price of a substitute shifts the demand curve to the _______
a. right b. left c. it does not change the demand curve d. none of the above
Suppose the real gross domestic product (GDP) equals $100 billion this year and the nominal gross domestic product (GDP) is $200 billion. This implies that the price level has increased by _____
a. $200 billion b. 50 percent c. $100 billion d. 100 percent e. 200 percent
Which of the following is a normative statement?
a. The unemployment rate has decreased. b. Governments should hire anyone who cannot get a job. c. Governments in most developed countries provide unemployment benefits. d. The majority of union members work for the government.