Suppose there is a decrease in the confidence that workers have in their future employment and income. This will cause
A. a decrease in borrowing, which will decrease interest rates.
B. a decrease in saving, which will decrease interest rates.
C. a decrease in saving, which will increase interest rates.
D. a decrease in borrowing, which will increase interest rates.
Answer: A
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An economic profit for a self-employed entrepreneur is
A) an opportunity cost. B) the same as the normal profit. C) a profit over and above opportunity cost. D) None of the above answers is correct.
If an increase in the government-imposed minimum wage pushes the price (wage) of unskilled labor above market equilibrium, which of the following will most likely occur in the unskilled labor market?
a. an increase in quantity of unskilled labor demanded b. a decrease in the quantity of unskilled labor supplied c. a shortage of unskilled labor d. a surplus of unskilled labor (unemployment)
Within the framework of the AD/AS model, if a long-run equilibrium is present in the goods and services market,
a. decision makers will have accurately forecast the current price level when they arrived at resource price and loanable funds agreements. b. the profit rates of the firms will generally exceed the competitive level. c. the actual rate of unemployment will be less than the natural rate of unemployment. d. output will exceed the economy's long-run sustainable output.
The discount rate is the interest rate
A) banks pay on certificates of deposit. B) the Fed pays on reserves held by banks. C) the Fed charges when it lends reserves to banks. D) banks charge their loan customers. E) on short-term Treasury securities.