Which of the following would you expect to increase the equilibrium interest rate?
A) an increase in the percentage of income after net taxes that households save
B) an increase in the budget deficit
C) a decrease in the profitability of investment projects firms are considering
D) the government begins running a budget surplus
Answer: B
You might also like to view...
Suppose a person with automobile collision insurance is more likely to try to drive on an icy road in the middle of winter than that person would be if he or she didn't have automobile collision. This is an example of
A. adverse selection. B. moral hazard. C. the free-rider effect. D. asymmetric information before exchange. E. none of the above
According to the above table, at a price of $2 per unit, which of the following would exist?
A) a shortage of 800 units B) a surplus of 800 units C) a shortage of 200 units D) a shortage of 400 units
Often, government spending increases due to log-rolling among politicians. Log-rolling is when politicians vote for which of the following?
a. projects the government leadership supports even when the citizens who elected the politician do not b. projects in their districts that are not efficient for the nation c. projects they normally would not support in return for other politicians voting for their projects d. projects that have benefits for the nation that outweigh their costs
Refer to the above diagram. A shift from AD1 to AD2 would be consistent with what economic event in U.S. history?
A. Full-employment in the late 1990s. B. Cost-push inflation in the mid-1970s. C. Demand-pull inflation in the late 1960s. D. Recession in 2001.