In the short-run, if the Federal Reserve increases interest rates, then consumption and investment ________, planned aggregate expenditure ________, and short-run equilibrium output ________.
A. increase; decreases; decreases
B. decrease; decreases; decreases
C. increase; increases; increases
D. increase; increases; decreases
Answer: B
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If consumers buy only gasoline and food, at their best affordable choice the marginal rate of substitution between food and gasoline ________ the relative price of food and gasoline
A) must exceed B) must be less than the C) must equal D) might exceed or be less than but not equal to
Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?
A) 1/2 of a ton of pineapples B) 1 1/3 tons of pineapples C) 2 tons of pineapples D) 90 tons of pineapples
Which of the following conditions must hold in the equilibrium of a competitive market where the government puts a specific tax on consumers?
A) The quantity sold and the price paid by the buyer must lie on the demand curve. B) The quantity sold and the seller's price must lie on the supply curve. C) The quantity demanded must equal the quantity supplied. D) the difference between the price the buyer pays and the price the seller receives must equal the specific tax. E) all of the above
If a union is able to successfully lobby Congress to limit imports of rival products, and thus to raise the demand (and thus price) for the goods or services they make, then which of the following best describes the outcome? a. The supply of labor will increase
b. The demand for labor will increase. c. The supply of labor will decrease. d. The demand for labor will decrease.