The economic benefits of owning a home are greater when home prices are
A. falling and interest rates are high.
B. rising and interest rates are low.
C. rising and interest rates are high.
D. falling and interest rates are low.
Answer: B
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When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP
a. True b. False Indicate whether the statement is true or false
Agreeing with Keynesian economists, monetarists believe that the economy is subject to disequilibrium that must be corrected by government action
a. True b. False Indicate whether the statement is true or false
Whenever spending changes, which of the following dampens the overall effect on GDP?
a. A change in the money supply. b. A change in taxes. c. A change in the interest rate. d. A change in the public's expectations. e. None of the above.
The budget line facing a household includes information on
a. prices of two goods and household income. b. household income and the price of money. c. the price of one good and household income. d. the price of two goods but no information on household income. e. preferences of goods at various prices.