Other things equal, an increase in the equilibrium interest rate will:
A. increase R&D spending.
B. rise when the supply of loanable funds increases.
C. decrease purchases of capital goods and reduce R&D spending.
D. increase bank lending.
Answer: C
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The view that inappropriate monetary policy was the main reason for the depth of the Great Depression in the United States is most closely associated with
A. the monetarist view. B. the rational expectations theory. C. the mainstream view. D. the real business cycle theory.
In many corporations, there is "separation of ownership from control." What does this mean?
A) The board of directors controls corporate operations, although the managers of the corporation own the corporation. B) Top corporate managers only make decisions that have been approved unanimously by shareholders. C) The shareholders control the corporation, although the board of directors owns the corporation. D) The managers of the corporation run the corporation, although the shareholders own the corporation.
Suppose the nominal price of gasoline was $0.90 per gallon in 1987. To convert this value to the real price of 1987 gasoline in 2012 dollars, we should:
A) multiply by the 1987 CPI and divide by the 2012 CPI. B) multiply by the 2012 CPI and divide by the 1987 CPI. C) not do anything because this is the real price in 2012 dollars. D) none of the above
Which of the following is not an example of the principle that trade can make everyone better off?
a. Americans buy tube socks from China. b. Residents of Maine drink orange juice from Florida. c. A homeowner hires the kid next door to mow the lawn. d. All of the above are examples of the principle that trade can make everyone better off.