Suppose a country has a larger increase in debt in 2014 than it had in 2013 . Then other things the same,
a. the supply of loanable funds shifts rightward and the interest rate falls.
b. the supply of loanable funds shifts leftward and the interest rate rises.
c. the demand for loanable funds shifts leftward and the interest rate falls.
d. the demand for loanable funds shifts rightward and the interest rate rises.
b
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The figure above shows the market for brooms. If 400 brooms are produced,
A) consumer surplus is maximized. B) producer surplus is maximized. C) market failure and a deadweight loss occur. D) marginal cost is greater than marginal benefit. E) consumer surplus equals zero.
When the efficient quantity of output is produced
A) the marginal social benefit of the last unit produced is equal to the marginal social cost of the last unit produced. B) the sum of consumer surplus and producer surplus is maximized. C) resources are used in the activities in which they are most highly valued. D) All of the above answers are correct.
One criticism of the new classical model is that it does not have an adequate explanation for
a. rising prices and output. b. short-run effects of monetary policy on output. c. how optimizing individuals form their expectations. d. the Great Depression. e. both c and d.
Firms in a perfectly competitive market achieve both allocative and productive efficiency in the short run
a. True b. False