When the expected real rate of interest declines, ceteris paribus, we expect:
a. more investment projects will be undertaken.
b. lenders will need to lower their average default rate to maintain their profit margins.
c. firms will borrow less and cut back on their investment projects.
d. individuals will steer clear of equity markets.
Ans: a. more investment projects will be undertaken.
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During the Great Depression in the United States between 1929 and 1933, banks' reserve/deposit ratio ________ and the amount of currency held by the public ________, while the money supply ________.
A. decreased; decreased; increased B. increased; increased; decreased C. decreased; decreased; decreased D. increased; increased; increased
We all behave as speculators in our economic transactions
A) because everyone likes to gamble. B) because we all act in the hope of benefits from a correct anticipation of future events. C) unless we never buy on credit. D) unless we use the services of middlemen.
The federal budget surplus recorded in 1998 resulted from a(n): a. decrease in taxes and rapid growth in federal outlays. b. increase in taxes and sluggish growth in federal outlays. c. decrease in taxes and a decrease in federal outlays
d. increase in federal outlays and taxes. e. increase in export earnings and decrease in import bills.
Which of the following better explains the fact that computers are cheaper now than 10 years ago? a. c and d b. c and e c. The technology used in the production of computers has improved during this period. d. Resources used in the production of computers have become cheaper during this period
e. The demand for computers has increased substantially during this period.