Refer to the diagram. Which of the following would shift the investment demand curve from ID 1 to ID 2
A. A lower interest rate.
B. Lower expected rates of return on investment.
C. A higher interest rate.
D. Higher expected rates of return on investment.
D. Higher expected rates of return on investment.
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Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the wage rate is $20 per hour and the marginal product of labor is 4 units, the firm's marginal cost must be equal to:
A) $5. B) $24. C) $40. D) $80.
The Federal Reserve increases interest rates when it wants to reduce aggregate demand to fight inflation. How do increases in the interest rate reduce aggregate demand?
What will be an ideal response?
The cost to a member bank of borrowing from the Federal Reserve is called the:
a. reserve requirement. b. discount rate. c. yield on government bonds. d. price of securities in the open market.
What does research into new technologies lead to?
a) It provides positive externalities because it creates knowledge others can use. b) It results in negative externalities because too many resources are used for the small benefits received by society. c) It results in negative externalities because government funding for research leads to cuts in government spending in other areas. d) It provides positive externalities because it increases profits for the company that receives government funding for research.