If long-term investments are increasing,
A. current consumption must be increasing.
B. interest rates must be relatively low.
C. interest rates must be relatively high.
D. the people must be experiencing a “defective telescopic faculty.”
Answer: B
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If the real interest rate is greater than the equilibrium real interest rate:
A) interest rates tend to rise further. B) the quantity of credit supplied falls short of the quantity of credit demanded. C) the quantity of credit demanded falls short of the quantity of credit supplied. D) the quantity of credit demanded equals the quantity of credit supplied.
The ________ is the interest rate that banks charge each other for overnight loans
A) spot interest rate B) discount window interest rate C) federal funds rate D) subsidized banking interest rate
Private costs are
A) external costs borne by private firms. B) explicit costs rather than implicit costs. C) costs borne by private members of society rather than governmental bodies. D) costs borne solely by the individuals who incur them.
Which of the following would cause the consumption function to shift down?
a. A decrease in disposable income b. A decrease in taxes c. An increase in taxes d. An increase in the marginal propensity to consume e. None of the above