Which of the following properly describes the interest-rate effect of aggregate demand?
a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, a higher interest rate increases the quantity of goods and services demanded.
b. A higher price level leads to higher money demand, higher money demand leads to lower interest rates, a higher interest rate reduces the quantity of goods and services demanded.
c. A lower price level leads to lower money demand, lower money demand leads to lower interest rates, a lower interest rate reduces the quantity of goods and services demanded.
d. A lower price level leads to lower money demand, lower money demand leads to lower interest rates, a lower interest rate increases the quantity of goods and services demanded.
D
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In a perfectly competitive market, if market price is lower than the average total cost of production:
A) new firms will enter the market. B) existing firms will leave the market. C) all existing firms will earn positive economic profits. D) all existing firms will earn zero economic profits.
Many smaller economies of the world have learned that if they do not participate actively in world _________, they will not thrive economically.
a. trade b. politics c. wars d. media
With regard to GDP, residential property taxes are an example of ____ taxes
a. variable b. sales c. fixed d. disposable
Other things the same, a higher interest rate induces people to
a. save more, so the supply of loanable funds slopes upward. b. save less, so the supply of loanable funds slopes downward. c. invest more, so the supply of loanable funds slopes upward. d. invest less, so the supply of loanable funds slopes downward.