The interest rate effect states that _____________.
Fill in the blank(s) with the appropriate word(s).
higher prices push up interest rates, lowering the consumption of certain goods and services
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For people with very low incomes, the Earned Income Tax Credit operates like a(n):
A. wage subsidy. B. lump sum transfer. C. tax on wages. D. in-kind transfer.
Assume there is an improvement in the technology used to produce Blu-ray disc players. What could be expected to happen to the equilibrium price and quantity in the market for Blu-ray disc players?
A) Equilibrium price would increase and equilibrium quantity would decrease. B) Equilibrium price and quantity would both decrease. C) Equilibrium price would decrease and equilibrium quantity would increase. D) Equilibrium price and quantity would both increase.
An increase in income in an open economy nation will cause a change in consumer spending on home production, and a(n):
a. increase in taxes. b. decrease in savings. c. increase in foreign production. d. increase in imports if MPCF (marginal propensity to consume foreign goods) is greater than zero.
If the nominal interest rate is 20% per year, how much money can an individual borrow today if she wants to repay $100 in one year?
A) $80.00 B) $83.33 C) $120.00 D) $78.00 E) $121.00