One role of the interest rate is to

A. allocate capital to its most efficient uses.
B. discourage saving and encourage current consumption.
C. redistribute income from the wealthy to the poor.
D. reduce the rate of inflation by encouraging government borrowing.


Answer: A

Economics

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When firms leave a perfectly competitive market, then, other things remaining unchanged:

a. the market supply will decrease but the market price will rise. b. both the market supply and the market price will fall. c. both the market demand and the price will increase. d. the market demand will decrease but the market price will rise. e. both the market demand and the market supply will decrease.

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According to John Maynard Keynes, policy makers should respond to a downturn in the business cycle by:

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Economics