Reducing the interest rate, ceteris paribus, is likely to reduce the level of planned investment spending.
Answer the following statement true (T) or false (F)
False
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The profit-maximizing rule for a perfectly competitive firm when choosing its level of output is to produce where price is equal to marginal cost
The profit-maximizing rule for a firm hiring labor in a perfectly competitive labor market is to hire workers up to the point where the marginal revenue product equal to the market wage. How are these two rules related to one another?
Representative money is
a. accepted on faith. b. found in M1 and M2 money measures. c. today in the form of check able deposits. d. redeemable for a commodity.
If the price level rises, the effect on the expenditure schedule and equilibrium real GDP is to
a. increase both. b. decrease both. c. shift the expenditure schedule upward and decrease equilibrium real GDP. d. shift the expenditure schedule downward and increase equilibrium real GDP.
The slope of the demand for loanable funds curve represents the
a. positive relation between the real interest rate and investment. b. negative relation between the real interest rate and investment. c. positive relation between the real interest rate and saving. d. negative relation between the real interest rate and saving.