Unexpected lower interest rates redistribute income from
A. Borrowers to lenders.
B. Businesses to banks.
C. Lenders to borrowers.
D. Spenders to savers.
Answer: C
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Economic growth is achieved through: (check all that apply)
a. increased supplies of the factors of production. b. advances in technology. c. reduction in the quality of resources. d. decreased demand for the factors of production.
Due to the network externalities in the game console market, we would expect this market to
A. be efficient. B. be serviced by a natural monopoly. C. be highly concentrated. D. overproduce game consoles.
Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?
a. 1 percent b. 5 percent c. 10 percent d. 20 percent e. 0 percent
Suppose the real GDP is in equilibrium at full employment and the MPC is .80. If government wants to increase its purchase of goods and services by $16 billion without changing equilibrium real GDP, taxes should be
A. reduced by $20 billion. B. increased by $16 billion. C. reduced by $16 billion. D. increased by $20 billion.