The United States sees its overall price level decline, ceteris paribus. Considering this, which of the following actions would most likely happen next?
a. U.S. firms invest more money in bonds and savings accounts, which lowers interest rates.
b. U.S. consumers spend less money, which increases the quantity of real GDP demanded.
c. U.S. firms hold more money to buy goods and services, which raises interest rates.
d. U.S. households borrow more money, which decreases the demand for loanable funds.
a. U.S. firms invest more money in bonds and savings accounts, which lowers interest rates.
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The circular flow diagram shows that
A) households spend all their income on goods and services. B) the value of total income is equal to the total value of expenditures on final goods and services. C) firms pay households wages, and households receive transfer payments from firms. D) GDP will be less than the total value of expenditures on final goods and services in the economy.
The "WIN" button approach to breaking a wage-price spiral was proposed by President Ford to a joint session of Congress
a. True b. False Indicate whether the statement is true or false
If the reserve ratio was 100 percent, then:
A. maximum lending would occur. B. banks would create money in the economy. C. banks would lend all of their deposits. D. no lending would occur using deposits.
(Consider This) The prisoner's dilemma is generally demonstrated through:
A. the kinked-demand model. B. game theory. C. monopolistic competition. D. a tightly knit cartel.