If we observe that interest rates rise but real investment spending still increases, what must have happened to the function relating investment to the interest rate?
A. It shifted to the left.
B. There was a movement up the function relating investment to the interest rate.
C. It shifted to the right.
D. There was a movement down the function relating investment to the interest rate.
Answer: C
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If U.S. imports increase, the sum of the balance of payments accounts (the sum of the current account plus capital and financial account plus official settlements account)
A) becomes negative. B) becomes positive. C) becomes negative or positive depending on the government budget deficit or surplus. D) does not change.
In Table 1, Tony's income elasticity of demand for steaks is
A) 1.0. B) greater than 1.0. C) less than 1.0. D) zero.
A commercial bank has $1,000,000 of outstanding demand deposits and actual reserves of $300,000 . If the required reserve ratio is 20 percent, what is the maximum amount of new loans the bank can extend?
a. zero b. $100,000 c. $300,000 d. $700,000
The demand for labor is said to be a derived demand because it comes from the demand for goods that labor produces. Suppose that strawberries are a labor-intensive good. An increase in the price of strawberries will ________ the demand for strawberries, which will ________ the demand for strawberry pickers
A) increase, increase B) increase, decrease C) decrease, increase D) decrease, decrease