The investment demand slopes downward and to the right because lower real interest rates:
A. expand consumer borrowing, making investments more profitable.
B. boost expected rates of returns on investment.
C. enable more investment projects to be undertaken profitably.
D. create tax incentives to invest.
C. enable more investment projects to be undertaken profitably.
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Cost functions must be homogeneous of degree 1 in (input and output) prices.
Answer the following statement true (T) or false (F)
When mortgage loans are securitized, they are
A) issued to borrowers with flawed credit histories. B) issued to borrowers who fail to document their income. C) bundled together by financial institutions and sold to investors. D) guaranteed by the federal government.
Joe's income is $500, the price of food (F, y-axis) is $2, and the price of shelter (S, x-axis) is $100. Which of the following bundles is in Joe's opportunity set?
A) 50 units of food, 5 units of shelter B) 200 units of food, 2 units of shelter C) 100 units of food, 1 unit of shelter D) 150 units of food, 3 units of shelter
List the four components of GDP