Classical macroeconomic theorists argued that when households reduce consumption and deposit money into savings accounts, aggregate spending will:
A. increase because households will have more wealth.
B. fall because banks typically make it difficult for businesses to borrow money.
C. fall because consumers are saving instead of spending.
D. not fall because banks will lend that money out to businesses.
Answer: D
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If output is increased in the long-run, average production costs in the presence of internal economies of scale will ________, and in the presence of external economies of scale, will ________
A) decrease; decrease B) increase; remain constant C) remain constant; increase D) decrease; remain constant E) increase; decrease
When the Fed increases the money supply, the interest rate decreases. This decrease in the interest rate increases consumption and investment demand, so the aggregate-demand curve shifts to the right
a. True b. False Indicate whether the statement is true or false
On the settlement date of a futures contract:
A. the future's price is equal to the price of the underlying asset. B. the future's price is always below the price of the underlying asset. C. the future's price may be above or below the price of the underlying asset but not equal to it. D. the future's price is always above the price of the underlying asset.
In the Utah Pie case, the economic effect of the Supreme Court decision was to:
a. prohibit the merger of two small pie companies. b. encourage competition by ruling that the national competitors had engaged in illegal price discrimination. c. encourage competition by ruling that the national competitors had not engaged in illegal price discrimination. d. discourage competition by national competitors in the Salt Lake City market.