Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above
As a result of an increase in the government budget deficit, the ________ for loanable funds will ________, thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.
A) supply; rise; decreasing; increasing B) demand; fall; decreasing; decreasing
C) demand; rise; increasing; decreasing D) supply; fall; increasing; decreasing
D
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The demand for a luxury good whose purchase would exhaust a big portion of one's income is
A. relatively elastic. B. relatively inelastic. C. perfectly elastic. D. unit-elastic.
According to the theory of rational expectations, expansionary fiscal policy that is anticipated will:
a. cause wage expectations to adjust downward immediately following the lower price level. b. increase the real wage rate in the long run. c. cause a permanent decline in the natural rate of unemployment. d. decrease the real wage rate in the long run. e. cause wage expectations to adjust upward immediately following the higher price level.
Suppose total benefits and total costs are given by B(Y) = 100Y ? 8Y2 and C(Y) = 10Y2. Then marginal costs are:
A. 20Y2. B. 20Y. C. 5Y. D. 40.
The Great Depression, in which real GDP fell and unemployment rose, can be characterized as a...
What will be an ideal response?