A reduction in the real interest rate will increase investment spending, other things equal, because firms will make an investment purchase if the expected return is
What will be an ideal response?
greater than or equal to real interest rate at which it can borrow.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
If Jose is 22-years old, is available to work but does not have a job and made no specific efforts to find a job for the previous month, Jose is classified in the Current Population Survey as
A) not in the labor force. B) not in the working-age population. C) unemployed. D) in the labor force but not in the working-age population. E) employed.
Farmers who work for themselves with their own equipment on their own land could earn accounting profits and economic losses at the same time
a. True b. False Indicate whether the statement is true or false
Economists believe that the optimal level of pollution is zero
a. True b. False Indicate whether the statement is true or false