Holding other factors constant, if growing concerns about job security raise precautionary saving, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. increase; increase
B. decrease; decrease
C. decrease; increase
D. increase; decrease
Answer: C
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If the economy is in an equilibrium with real GDP less than potential GDP, a fiscal stimulus could move the economy toward potential GDP by simultaneously ________ taxes and ________ government expenditures on goods and services
A) raising; increasing B) raising; decreasing C) cutting; increasing D) cutting; decreasing E) raising; not changing
Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If Anna receives $100 from the auction she can infer that
a. Both the bidders were high value bidders b. Both the bidders were low value bidders c. One of the bidders was high value, while the other was low value d. All of the above
Investing in things with unrelated risk is:
A. the key to diversification. B. irrational. C. increasing the likelihood that a catastrophe will occur. D. None of these statements is true.
Opportunity cost refers to whatever is given up to obtain some item.
Answer the following statement true (T) or false (F)