According to the classical model shown above, an autonomous decline in investment shifts the investment schedule to the left. Furthermore, the equilibrium interest rate declines. Distance A describes an interest rate induced
a. decline in saving, which is an equal increase in consumption.
b. increase in investment.
c. decrease in investment.
d. decline in saving, which exceeds the increase in consumption.
A
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Mike is able to complete a tax return in two hours earning a fee of $100 . As an alternative, he could pitch in at a volunteer car wash washing four cars in one hour. His roommate Joe would take four hours to complete a tax return earning a $100 fee and also can wash four cars in one hour. Both individuals could benefit if
a. Mike worked on tax returns for eight hours and paid Joe $5 for each car he washed b. Mike worked on tax returns for eight hours and paid Joe $10 for each car he washed. c. Mike worked on tax returns for eight hours and paid Joe $15 for each car he washed d. Joe worked on tax returns for eight hours and paid Mike $10 for each car he washed
How does the form that government spending takes affect resource allocation between public goods and private goods?
The exchange rate changed from € 2.5/ $ to € 2.0/ $. Therefore:
a. The euro appreciated by 20% and the dollar depreciated by 20%. b. The euro depreciated by 20% and the dollar appreciated by 20%. c. The euro appreciated by 25% and the dollar depreciated by 25%. d. The euro depreciated by 25% and the dollar appreciated by 25%. e. The euro appreciated by 25% and the dollar depreciated by 20%.
When a monopolistically competitive firm is in a long-run equilibrium, the values of marginal cost, average total cost, and price are all the same
a. True b. False Indicate whether the statement is true or false