All else equal, more investment takes place at
A. higher market interest rates.
B. higher nominal interest.
C. lower market interest rates.
D. higher real interest rates.
Answer: C
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Suppose that the United Kingdom devalues the pound. If both exports and imports are written in terms of pounds, then the United Kingdom balance of trade ________ during a currency contract period
A) improves B) worsens C) is unaffected D) falls for a while before increasing
Which of the following industries would be considered to have a capital intensive production process?
A. Auto manufacturing B. Farming in a poor country C. Writing a novel. D. Art restoration.
The real balances effect predicts that higher prices:
A. make people worse off by reducing the value of their wealth, leading them to save more and spend less. B. make people worse off by reducing the value of their wealth, leading them to save less and spend more. C. make people better off by increasing the value of their wealth, leading them to save less and spend more. D. increase borrowing, leading to higher interest rates and less investment.
According to the laws of demand and supply, if the price of beef increases, which of the following likely will occur?
A. The quantity demanded will decrease. B. The quantity demanded will remain constant. C. The quantity demanded will increase. D. The equilibrium price will increase but there will be no change in the market price. E. The quantity supplied will decrease.