An increase in the demand for loanable funds increases the equilibrium interest rate and increases the equilibrium level of saving
a. True
b. False
Indicate whether the statement is true or false
True
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If aggregate planned expenditures are less than real GDP, then
A) inventories increase above their planned levels and businesses increase their production. B) unplanned inventory changes equal zero. C) inventories decrease below their planned levels and businesses increase their production. D) inventories increase above their planned levels and businesses decrease their production. E) there is no equilibrium level of real GDP.
Suppose that after five solid years of economic growth, Eurekaland begins to experience inflationary pressures due to strong consumer and investor confidence. If Eurekaland's Central Bank wants to prevent inflation from becoming a major problem, which of the following actions should it take?
A) It should reduce the money supply to push interest rates higher. B) It should increase the money supply to push interest rates higher. C) It should reduce the money supply to push interest rates lower. D) It should increase the money supply to push interest rates lower.
A tariff ______ the world supply of a good.
Fill in the blank(s) with the appropriate word(s).
In the space provided in the graph above, draw a perfectly inelastic demand curve and state its elasticity.
