An increase in the real interest rate occurs when ________
A) monetary policy responds automatically to an increase in inflation
B) expected inflation increases, relative to the nominal interest rate
C) an increase in autonomous spending causes an increase in equilibrium output
D) all of the above
E) none of the above
A
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Refer to the table below. Corey's opportunity cost of delivering of a pizza is making: Pizzas MadePer HourPizzasDeliveredPer HourCorey126Pat1015
A. 2 pizzas. B. 12 pizzas. C. 1/2 of a pizza. D. 6 pizzas.
Using the simple Keynesian model with a consumption function of C = 200 + .9Y, an $10 change in desired investment leads to a change in equilibrium income of
A) $10. B) $100. C) $20. D) $90.
If people expect prices to rise in the future, the consumption curve will shift upward
Indicate whether the statement is true or false
Suppose Lois usually buys two cups of coffee for two dollars each and one scone for two dollars each. If the price of scones falls to one dollar each and she now buys two cups of coffee and two scones, this illustrates the
A. substitution effect. B. marginal rate of substitution. C. real-income effect. D. total utility effect.