In September of 2007, the Federal Reserve Board Open Market Committee voted to lower interest rates for the first time that year. Explain how lower interest rates affect the aggregate demand curve
What will be an ideal response?
Reducing the interest rate lowers the cost of borrowing to firms and to households. As a result, both firms and households will increase expenditures. This increase in expenditures will shift the aggregate demand curve to the right.
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The reversal of fortune can be attributed to the fact that:
A) economic institutions in European colonies were inclusive in all nations. B) economic institutions in European colonies were extractive in prosperous nations and inclusive in other nations. C) economic institutions in European colonies were extractive in all nations. D) economic institutions in European colonies were inclusive in prosperous nations and extractive in other nations.
Which of the following variables are needed to determine the break-even quantity?
a. Marginal costs b. Fixed Costs c. Selling Price d. All of the above
An increase in the quantity of capital per worker would: a. rotate the per-worker production function outward
b. rotate the per-worker production function inward. c. shift the per-worker production function downwards. d. shift the per-worker production function upwards. e. result in a rightward movement along the current per-worker production function.
___________ prices are set by large corporations for relatively long periods of time.
Fill in the blank(s) with the appropriate word(s).