If the prices of energy products rise sharply, consumers will most likely
a. sharply reduce their consumption of these products in both the short run and the long run.
b. reduce their consumption of these products slightly in the short run and more sharply in the long run.
c. reduce their consumption of these products sharply in the short run, but in the long run consumption will fall by only a small amount.
d. increase their consumption of these products slightly in the short run and more sharply in the long run.
B
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The components of aggregate expenditure are consumption expenditure,
A) investment, government expenditure on goods and services, and net exports. B) investment, government expenditure on goods and services, and net taxes. C) interest, government expenditure on goods and services, and net exports. D) investment, government expenditure on goods and services, and net income. E) interest, gross spending, and net spending.
If investment demand increases, the equilibrium real interest rate ________ and the equilibrium quantity of investment ________
A) rises; decreases B) falls; decreases C) falls; increases D) rises; increases E) does not change; does not change
An economic system in which resources are privately owned and allocated by the market is called
a. market capitalism b. market socialism c. centrally-planned capitalism d. centrally-planned socialism e. a tradition-based economy
Savers are motivated by the
A. real interest rate. B. advertised interest rate. C. expected rate of inflation. D. nominal interest rate.