The interest rate effect shows that if the price level increases
A. consumers and businesses will borrow more to replenish their real money balances, which pushes up interest rates and causes spending to decrease.
B. U.S. exports and imports will both decrease.
C. consumers and businesses will increase their spending to buy the same amount of goods as before to make up for the higher interest rates.
D. the real value of financial assets will increase.
Answer: A
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If two risky assets, A and B, have negative correlation, then when A's yield increases
A) B's yield increases. B) B's yield decreases. C) B's yield can increase or decrease. D) There is not enough information to determine what B's yield will do.
Income elasticity of demand measures how
a. the quantity demanded changes as consumer income changes. b. consumer purchasing power is affected by a change in the price of a good. c. the price of a good is affected when there is a change in consumer income. d. many units of a good a consumer can buy given a certain income level.
Vertical foreclosure is an example of a firm:
A. engaging in penetration pricing. B. that merges with a rival firm with the intention of eliminating the rival firm's product from the market. C. that controls an essential upstream input and raises rivals' costs by refusing to sell to other downstream firms that need the input. D. engaging in a price-cost squeeze.
Extensive and productive exchanges among people who barely know one another
What will be an ideal response?