Refer to the information provided in Figure 23.8 below to answer the question(s) that follow.
Figure 23.8Refer to Figure 23.8. The amount of planned investment ________ if the interest rate falls from 8% to 4%.
A. remains at $125 billion
B. rises by $150 billion
C. drops by $150 billion
D. remains at $275 billion
Answer: B
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With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income
Indicate whether the statement is true or false
Refer to the graph shown. Between points E and F demand is:
A. elastic. B. inelastic. C. unit elastic. D. perfectly elastic.
One of Keynes’ most profound insights was that
a) markets allocate resources efficiently, as if by an invisible hand b) comparative advantage allows all nations to gain from trade c) capitalists exploit workers by paying them less than the total value of what they produce d) the same factor that drives long run growth—technological change—also causes business cycles e) the economy can achieve an equilibrium below its capacity
An imperfection in the market mechanism that prevents optimal outcomes is called
A. Price leadership. B. Collusion. C. Antitrust behavior. D. Market failure.