In the Keynesian model, if interest rates fall below what people consider normal, households will respond by
A) decreasing the saving rate.
B) reducing the saving rate.
C) holding more money.
D) holding more bonds.
C
You might also like to view...
When the average product is at its maximum,
A) the marginal product is increasing as output increases. B) the marginal product is negative. C) it is equal to the marginal product. D) total product is also at its maximum. E) total product is at its minimum.
Figure 5-14
Martha initially buys the combination of pens and pencils shown as A in Figure 5-14. After the prices of both goods change, she buys combination B. It must be true that
A. Martha prefers A to B. B. Martha prefers B to A. C. Martha is indifferent between A and B. D. Martha’s preferences between A and B cannot be determined from the information given.
How does an increase in the relative price of a country's goods in terms of foreign goods, or real exchange rate, affect its balance of trade?
A) An increase in the real exchange rate reduces imports, raises exports, and increases the balance of trade. B) An increase in the real exchange rate raises imports, reduces exports, and reduces the balance of trade. C) An increase in the real exchange rate reduces imports, raises exports, and reduces the balance of trade. D) An increase in the real exchange rate raises imports, reduces exports, and increases the balance of trade.
Having a comparative advantage in the production of a good implies that a country
a. should specialize in the production of the good b. is able to produce the good with fewer resources than another country c. should not specialize in the production of the good d. also has the absolute advantage in the production of the good e. cannot have an absolute advantage in the production of the good