Refer to the information provided in Figure 34.3 below to answer the question(s) that follow.
Figure 34.3Refer to Figure 34.3. If British people want to buy more U.S. goods and assets, the supply of pounds will
A. shift from S0 to S2.
B. shift from S1 to S2.
C. shift from S1 to S0.
D. not change.
Answer: C
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When the government develops policies to stabilize the economy
A) only expansionary fiscal policy is impacted by the multiplier effect. B) only contractionary fiscal policy is impacted by the multiplier effect. C) these policies are unaffected by the multiplier effect. D) it needs to consider the multiplier effect for all fiscal policies.
Suppose households decide to reduce savings because they want to enjoy more present time than future time. In this case, the loanable funds model predicts that
A) interest rate goes down, and quantity of borrowed funds increases. B) interest rate goes down, and quantity of borrowed funds decreases. C) interest rate goes up, and quantity of borrowed funds decreases. D) interest rate goes up, and quantity of borrowed funds increases.
The amount of government debt is called the public cost.
Answer the following statement true (T) or false (F)
Which would you rather have? a) $10,000, 20 years from now at 4% interest or b) $10,000 7 years from now if the interest rate is 12%.
What will be an ideal response?