An increase in the real interest rate leads to a(n) ________
A) increase in demand for capital B) decrease in demand for labor
C) increase real output D) increase in demand for money
B
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Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and current international transactions balance in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and current international transactions balance becomes more negative (or less positive). b. Real GDP rises and current international transactions balance becomes more negative (or less positive). c. Real GDP and current international transactions balance remain the same. d. Real GDP rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
In which of the following industry structures is the entry of new firms the most difficult?
A. Pure monopoly. B. Oligopoly. C. Monopolistic competition. D. Pure competition.
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
During the 1920s, income inequality ______ and the return on schooling was relatively _____
a. increased; low b. increased; high c. decreased; low d. decreased; high