If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates?
There is a shortage. The interest rate will rise.
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When the SRAS curve slopes upward, the actual affect of an increase in real autonomous spending on equilibrium real GDP is smaller than predicted by the multiplier because
A) the price level rises B) the price level falls. C) real GDP increases. D) real GDP decreases.
What is the crowding-out effect and how does it work?
What will be an ideal response?
A product in the first stage of production is defined as a(n):
a. basic need. b. investment. c. environmental product. d. primary product. e. transitory product.
Most economists believe that monetary neutrality provides
a. a good description of both the long run and the short run. b. a good description of neither the long run nor the short run. c. a good description of the short run, but not the long run. d. a good description of the long run, but not the short run.