When interest rates fall in a given economy, it causes firms to borrow __________ funds used for purchasing capital goods. The result will be a(n) ___________ in the level of capital employed in the economy. In terms of the production function (graphed with labor on the horizontal axis and Real GDP on the vertical axis), this then causes ____________________ which makes the LRAS curve shift
____________ resulting in ______________________.
A) more; increase; the production function to shift upward; rightward; economic growth
B) less; decrease; the production function to shift downward; leftward; a shrinking economy
C) more; increase; a movement up along a given production function; rightward; economic growth
D) more; increase; a movement down along a given production function; leftward; a shrinking economy
A
You might also like to view...
If a good is Giffen and its price increases,
a. the income effect will be positive and the substitution effect will be positive. b. the income effect will be negative and the substitution effect will be negative. c. the income effect will be positive and the substitution effect will be negative. d. the income effect will be negative and the substitution effect will be positive.
A demand schedule relates prices of a particular good to quantities demanded
a. True b. False Indicate whether the statement is true or false
The fiscal agent of the U.S. government is the
A. Federal Reserve System. B. Securities and Exchange Commission. C. U.S. Treasury. D. Congress.
You like to sleep until 9:00 am during the semester. What is the opportunity cost of attending an 8:00 am class?
A. sleep B. obtaining the notes from the 8:00 am class C. the credit hours earned from the 8:00 am class D. nothing, since you can go back to bed later