The introduction of new technologies ________ the real interest rate and ________ the equilibrium quantity of national saving.

A. increases; decreases
B. increases; increases
C. decreases; decreases
D. decreases; increases


Answer: B

Economics

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If autonomous imports increase, then the aggregate expenditure curve shifts ________ and equilibrium real GDP ________

A) upward; increases B) downward; does not change C) downward; increases D) upward; decreases E) downward; decreases

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When the Fed buys $100 million of securities from a commercial bank, the

A) monetary base increases. B) money supply decreases. C) bank's reserves decrease. D) required reserve ratio decreases. E) bank is risking its depositors' money.

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Each member in a group might do what's best for himself or herself instead of behaving in a way that optimizes the well-being of the entire group. This gives rise to the problem of:

A) Pareto inefficiency. B) free riding. C) irrational behavior. D) disequilibrium.

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Suppose an investment bank has a leverage ratio of 10 and the value of its securities decline by 10%. What happens to its return on equity investment?

A) declines by 1% B) increases by 1% C) declines by 100% D) increases by 100%

Economics