Classical economists believed that if saving were greater than investment, the interest rate would _____, causing saving to _____ and investment to _____ until the two were equal
a. rise; decrease; increase
b. fall; decrease; increase
c. fall; increase; decrease
d. rise; increase; decrease
e. fall; increase; increase
b
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A contestable market is one in which
A) one dominant firm sets the market price, and all other firms are price takers. B) if a firm cuts its price, all other firms will follow the price cut. C) one or a small number of firms operate, but faces competition from potential entrants. D) a group of firms enter into an agreement to restrict output and raise prices.
Evaluate the overall tax incidence of state and local taxes in contrast with federal taxes. In addition, what can be concluded about the overall tax system?
What will be an ideal response?
If the expected earnings of an investment project exceed all expenses except interest payments,
A) business firms will not undertake the project. B) business firms will undertake the project and raise prices later. C) business firms will not undertake the project but will borrow the funds. D) consumers will get lower prices.
As compared to a firm that competes for labor, a monopsony will:
a. hire fewer workers and pay lower wages. b. hire fewer workers by pay higher wages. c. pay lower wages but hire more workers. d. pay higher wages and hire more workers.