As the interest rate increases
A. Consumption, investment, and net exports increase, and aggregate demand increases
B. Consumption increases but investment and net exports decrease; aggregate demand remains unchanged
C. Consumption, investment, and net exports decrease; aggregate demand decreases
C. Consumption, investment, and net exports decrease; aggregate demand decreases
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Because the sale of goods and services generates income for the sellers,
A) GDP is unaffected by such exchanges. B) national income will usually by greater than GDP. C) national income will essentially equal GDP. D) national income will increase, but GDP will decrease. E) sales taxes must be subtracted from GDP.
If the market price is at equilibrium, the producer surplus is minimized
Indicate whether the statement is true or false
The relationship between the market system and private property is
a. as the market system expands, private property declines in that society. b. private property rights interfere with the operation of the market system. c. the market system functions best when the rights of private property are protected. d. None of these.
Suppose you borrow $8,000 for one year and at the end of the year you repay the $8,000 plus $600 of interest. The expected inflation rate was 3.5% at the time you took out the loan, but the actual inflation rate turned out to be 2.5%
What was the expected real interest rate at the time of the loan? What was the actual real interest rate you paid? Who gained and who lost from the difference in the expected and actual inflation rates?