One mechanism through which increasing public debt may impact the economy is that the resulting
A. increased competition for funds increases interest rates and causes a reduction in investment.
B. decreased competition for funds decreases interest rates and causes an increase in investment.
C. increased competition for funds decreases interest rates and causes an increase in investment.
D. decreased competition for funds decreases interest rates and causes a reduction in investment.
Answer: A
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In the above figure, flow B represents households' ________
A) income B) consumption expenditures C) saving D) investment
The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the
A) income elasticity of demand. B) income expansion path. C) demand elasticity equivalent. D) trade effectiveness.
A consumer's marginal willingness to pay
A) changes with price. B) is equal to the marginal value to the consumer of the last unit of output. C) is the minimum price a consumer will pay for the last unit of output. D) is the first derivative of the demand curve.
Figure 10-5
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Figure 10-5 shows the short-run cost relationships for a perfectly competitive firm. Based on this diagram, which point would not be on the firm’s short-run supply curve?
A. D B. B C. C D. H