When the Fed raises the federal funds rate,
A) the real interest rate is unchanged so investment and consumption expenditure are not changed.
B) the real interest rate increases, thereby decreasing investment and consumption expenditure.
C) the real interest rate falls, thereby increasing investment and consumption expenditure.
D) investment and consumption expenditure increase, thereby raising the real interest rate.
E) the real interest rate increases, thereby decreasing investment and increasing consumption expenditure.
B
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Which of the following is a not direct result of scarcity?
A. Buildings in New York City are taller than buildings in Greenville, SC due to fewer acres of land per person. B. Due to high gas prices, Shana decides to trade her Chevy Tahoe for a Honda Accord. C. A college student misses a test review in order to sleep in. D. The total amount of air we can breathe as others draw breaths from that same air space.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and net nonreserve-related borrowing/investing in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and net nonreserve-related borrowing/investing becomes more negative (or less positive). b. Real GDP rises and net nonreserve-related borrowing/investing becomes more negative (or less positive). c. Real GDP falls and net nonreserve-related borrowing/investing becomes more positive (or less negative). d. Real GDP and net nonreserve-related borrowing/investing remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
If the production possibilities curve is a downward sloping straight line, then
A. technological change has increased. B. all resources must be perfectly adaptable for alternative uses. C. production is efficient only when producing at the mid-point. D. resources are highly specialized, making it difficult to use them for alternative uses.
The study of development economics is to understand
A) the personality factors that lead people to become entrepreneurs. B) why most of the patents on record have been given to men rather than to women. C) why some countries are rich and others are poor. D) why some products are successful in the market as soon as they are developed, whereas others do not catch on for years.