When an economy is experiencing an economic boom and operating beyond its long-run capacity,
a. strong demand for investment funds will push interest rates upward.
b. weak demand for resources will push the prices of resources downward.
c. weak demand for investment funds will cause the real interest rate to decline.
d. the unemployment rate will be greater than its natural rate.
A
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For a particular good, an 8 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. There are no close substitutes for this good. b. The good is a necessity. c. The market for the good is broadly defined. d. The relevant time horizon is long.
Self- reinforcing mechanisms that cause the poor to stay poor are called:
A. poverty traps. B. societal traps. C. social networks. D. social aberrances.
What is necessary for a firm to be part of a perfectly contestable market?
What will be an ideal response?
If the economy is underutilizing its economic resources, the Fed should
A) discourage investment spending. B) expand the money supply to increase aggregate demand. C) decrease aggregate supply. D) contract the money supply to decrease aggregate demand.