Other things equal, in the short run a lower price level leads households to
a. increase consumption and firms to buy more capital goods.
b. increase consumption and firms to buy fewer capital goods.
c. decrease consumption and firms to buy more capital goods.
d. decrease consumption and firms to buy fewer capital goods.
a
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Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and real GDP falls. b. The quantity of real loanable funds per time period rises, and real GDP rises. c. The quantity of real loanable funds per time period rises, and real GDP remains the same. d. The quantity of real loanable funds per time period and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The use of the coordinate system allows
a. for the display of the flows of dollars, goods and services, and factors of production in an economic system. b. for the display of how labor and other resources are organized in the production process. c. for the display of two variables on a single graph. d. for the creation of pie charts and bar graphs.
In 2015, U.S. GDP was almost
a. $18 trillion. b. $15 trillion. c. $14 trillion. d. $12 trillion.
The perfectly competitive market structure benefits consumers because
A) firms do not produce goods at the lowest possible price in the long run. B) firms are forced by competitive pressure to be as efficient as possible. C) firms add a much smaller markup over average cost than firms in any other type of market structure. D) firms produce high-quality goods at low prices.