When an economy experiences deflation, investment will:
A. increase, because businesses will spend cash instead of borrowing it.
B. increase, because businesses will take out loans that will increase in value.
C. decrease, because businesses will spend cash instead of borrowing it.
D. decrease, because businesses will not take out loans that will increase in value over time.
Answer: D
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Which of the following lies primarily within the realm of macroeconomics?
A. a study of the demand for gasoline B. a study of how tax cuts stimulate aggregate production C. an analysis of supply and demand conditions in the electricity market D. a study of the impact of "mad cow" disease on the price of beef worldwide
If the intertemporal substitution hypothesis is correct, then
A. the unemployment rate is always artificially high. B. discouraged workers will not exist. C. discouraged workers should be included in the unemployed population because they actually want a job at the going wage. D. discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages. E. the unemployment rate is always artificially low.
A defined benefit pension program is one in which
A. everyone gets the same amount, regardless of how much they work. B. the plan defines eligibility for retirement and benefits according to a set of rules and a formula. C. those in the plan, as well as their employer, contribute to an account according to a formula, and the investment of that account is under the control of the employee. D. benefits are untaxed.
Aggregate supply can usually be increased as workers
A. work smarter, better and more efficiently when provided with better, education, tools, and technology. B. work smarter, better, and more efficiently. C. work harder. D. are provided with better education, tools, and technology.