Congress and the President implement an investment tax credit. Which curve in the market for loanable funds shifts, which direction does it shift, and what happens to the interest rate?
The demand for loanable funds shifts right. The interest rate rises.
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
The demand for money is ________ related to the nominal interest rate
A) positively B) negatively C) not D) None of the above answers is correct because the relationship between the demand for money and the nominal interest rate changes with the inflation rate.
A monopolistically competitive firm will:
a. maximize profits by producing where MR = MC. b. not likely earn an economic profit in the long run. c. shut down if price is less than average variable cost. d. all of these.
Which of the following might increase the supply curve of labor?
a. Easing licensing requirements. b. Elimination of discrimination against blacks. c. All of the answers are correct. d. Elimination of discrimination against females.