The interest rate effect that helps explain the slope of the aggregate demand curve arises because
A) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures.
B) interest rates and total planned real expenditures are unrelated.
C) an increase in the price level boosts interest rates, which discourages borrowing and hence reduces planned real expenditures.
D) a decrease in the price level boosts interest rates, which discourages borrowing and hence frees up income for more planned real expenditures.
C
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The equilibrium quantity in a perfectly competitive market is determined:
A) at the point of intersection of the demand curve and the quantity axis. B) at the point of intersection of the demand and supply curves. C) at the point of intersection of the supply curve and the quantity axis. D) at the point of tangency between the demand and supply curves.
Which of the following is an important cause of inflation in an economy?
a. increases in productivity in the economy b. the influence of positive externalities on the economy c. lack of property rights in the economy d. growth in the quantity of money in the economy
The supply of dollars in foreign exchange markets is
A) determined by the Federal Reserve's Board of Governors. B) determined by the demand for U.S. goods. C) determined by the U.S. demand for foreign goods. D) a function of the international banking system.
Most cohesion funds in the EU budget go to the wealthier EU member nations
Indicate whether the statement is true or false