In the classical model the interest rate is determined by
a. real investment demand.
b. real saving.
c. government spending.
d. tax revenues.
e. all of the above.
E
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Rational people having preferences for immediate benefits and delayed costs is another way of saying that:
A. money is worth less to us now than in the future. B. money is worth more to us now than in the future. C. the value of money does not change over time. D. rational people have insatiable wants.
If a perfectly competitive firm charges a price that is equal to its average total cost:
A. the firm is earning an economic profit equal to zero. B. the firm is earning an economic profit greater than zero. C. the firm is earning an economic profit less than zero. D. It is not possible to determine anything about the firm's profits.
One reason why the price elasticity of supply for DVD players is greater than one is that
A) the cost of producing DVD players is small. B) the storage of DVD players is not possible. C) DVD players can be easily stored. D) the demand for DVD players is fairly large. E) DVD players require relatively advanced technology for their production.
Suppose that frozen dinners were once a normal good for John, but now frozen dinners are an inferior good for him. John's demand curve for frozen dinners
A) has become steeper as a result. B) has become flatter as a result. C) has not changed as a result. D) has disappeared as a result.