Suppose that there is an increase in disposable income and simultaneously an increase in the expected profitability of investment. As a result, the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________
A) remains unchanged; increases
B) rises; increases
C) might rise, fall, or remain unchanged; increases
D) falls; increases
E) might rise, fall, or remain unchanged; decreases
C
You might also like to view...
Assume the commercial banking system has checkable deposits of $20 billion and excess reserves of $2 billion when the reserve requirement is 25%. If the reserve requirement is then lowered to 20%, we can conclude that the ________.
A. banking system now has excess reserves of $3 billion B. Fed has decided that money supply needed to be reduced C. monetary multiplier has decreased D. maximum money-creating potential of the banking system has been increased by $7 billion
Refer to Figure 2-4. A movement from ________ is the result of additional government restrictions on the pollution that results from plastic production
A) X to W B) Z to W C) Z to Y D) X to V
A firm in a perfectly competitive market can maximize its profits by producing:
A. the level of output where marginal cost equals marginal revenue. B. any level below where marginal cost equals marginal revenue. C. any level beyond where marginal cost equals marginal revenue. D. slightly below its maximal capacity.
Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q384g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />In the Nash equilibrium of this game:
A. OPEC cheats on the agreement and Mexico abides by the agreement.
B. both Mexico and OPEC cheat on the agreement.
C. both Mexico and OPEC abide by the agreement.
D. Mexico cheats on the agreement and OPEC abides by the agreement.