A decrease in the money supply:
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP.
b. lowers the interest rate, causing a decrease in investment and an increase in GDP.
c. raises the interest rate, causing an increase in investment and a decrease in GDP.
d. raises the interest rate, causing an increase in investment and an increase in GDP.
e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
e
You might also like to view...
There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________
A) the cap-and-trade policy will not make the amount of pollution efficient B) Joe's industry will sell permits to Harry's industry C) Harry's industry will sell permits to Joe's industry D) Harry's industry and Joe's industry will emit the same quantity of sulfur dioxide
When the Fed decreases the required reserve ratio, then the:
a. ability of banks to make loans is restricted. b. ability of banks to make loans is enhanced. c. ability of banks to make loans is unaffected. d. interest rate that banks pay to the Fed to borrow money is reduced. e. interest rate that banks pay other banks to borrow money is decreased.
In the presence of a negative externality
a. the market marginal benefit curve lies above the market supply curve b. a market will produce less than the efficient quantity c. the market price will be too high for an efficient solution to exist d. the marginal social cost curve lies above the market supply curve e. Pareto optimality is automatically guaranteed
When ordinarily-neat people tend to litter in areas that are covered with graffiti, they illustrate the:
A. Planning fallacy B. Framing effect C. Confirmation bias D. Availability heuristic