Higher interest rates
A. increase total planned real expenditures because they lower the costs of building new plants and equipment.
B. reduce total planned real expenditures because they increase the cost of borrowing funds.
C. reduce total planned real expenditures because they reduce the income of bankers and other creditors.
D. increase total planned real expenditures because they increase the incomes of all people in the economy.
Answer: B
You might also like to view...
If there are significant external benefits associated with the consumption of a product, it can be said that the private benefit to the consumer ____ the relative importance of this product to society and output should ____ to move toward the efficient situation
a. overstates; increase b. understates; increase c. overstates; decrease d. understates; decrease
The aggregate-demand curve
a. has a slope that is explained in the same way as the slope of the demand curve for a particular product. b. is vertical in the long run. c. shows an inverse relation between the price level and the quantity of all goods and services demanded. d. All of the above are correct.
Which statement is true?
A. The Federal Open Market Committee has very little power. B. The Federal Reserve rarely raises or lowers the discount rate. C. Our money supply grows at a rate of between three and four percent a year. D. The Federal Reserve rarely changes the reserve requirements.
The cost-minimizing equilibrium condition can be written as
A. MPL = MPK. B. (MPL)(PL) = (MPK)(PK). C. MPL/PL = MPK/PK. D. PL = PK.