Because the United States is highly integrated with the international capital market, international capital flows tend to
a. counteract the negative effect on aggregate demand of lower interest rates.
b. counteract the positive effect on aggregate demand of higher interest rates.
c. strengthen the negative effects on aggregate demand of higher interest rates.
d. strengthen the negative effects on aggregate demand of lower interest rates.
c
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Refer to the figure above. What is the equilibrium quantity after the demand curve shifts to D2?
A) 20 units B) 30 units C) 35 units D) 50 units
Stimulating demand will improve the unemployment picture but
A. worsen inflation. B. decrease inflation. C. have no impact on inflation. D. None of the above is correct.
Which of the following explains why investment may be procyclical?
a) high installation costs for replacing, updating, and expanding the capital stock b) simultaneous investment by firms in various industries throughout the economy c) the correlation between current profits and investment expenditures d) the basing of expectations on current conditions e) all of the above
Technological improvements will:
A) leave the production possibilities curve unchanged. B) shift the production possibilities curve inward. C) shift the production possibilities curve to outward. D) necessarily lead to increased unemployment.