Refer to the market for loanable funds, as shown in the above graph. Suppose the market for loanable funds is originally in equilibrium at interest rate i0 and quantity Q0. In the next period, the equilibrium interest rate increases to i1 and quantity decreases to Q1. Which of the following could be the cause of this shift?
A. Households decide to save less
B. Households decide to save more
C. Investors become less optimistic
D. Investors become more optimistic
A. Households decide to save less
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Emissions permits allow polluters to pay for the right to pollute a specified amount.
Answer the following statement true (T) or false (F)
The act of firms working together to make decisions about price and quantity is called:
A. bulk ordering. B. artificial competition. C. collusion. D. price discrimination.
Using the UIP equation, equilibrium in the short run occurs when
a) arbitrage is possible b) the spot rate is such that foreign and domestic investment returns are equalized c) the spot rate and forward rate are equalized d) foreign interest rates and domestic interest rates are equalized
The following list contains factors that are related to the aggregate demand curve.1)Household expectations 2)Profit expectations 3)Degree of excess capacity 4)Personal income tax rates 5)Exchange rates 6)National income abroad 7)Government spending 8)Household wealth Changes in which three of the above factors would most likely cause a change in consumer spending?
A. 1, 2, and 6 B. 3, 5, and 7 C. 1, 4, and 8 D. 5, 6, and 7