In the Keynesian system a drop in investment __________ cause the interest rate to __________
A) will; fall
B) will; rise
C) does not; rise
D) does not necessarily; fall
D
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If tomato growers in Florida lobby the U.S. government to impose an import quota on Mexican tomatoes, who gains from such a quota?
A) Mexican growers B) the U.S. government C) no one D) U.S. consumers E) U.S. growers
The quantity theory asserts that real GDP is
A) not influenced by the quantity of money. B) never different from potential GDP. C) equal to nominal GDP multiplied by the quantity of money. D) equal to nominal GDP divided by the quantity of money.
When a developing country relies on import substitution,
a. it sacrifices the gains from specialization and comparative advantage b. replaces low-cost foreign goods with high-cost domestic goods c. domestic producers, shielded from foreign competition, usually fail to become efficient d. other countries often retaliate with their own trade restrictions e. All of the answers are correct
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.