Lower interest rates motivate:
A. firms to invest less in new factories and working capital.
B. firms to invest more in new factories and working capital.
C. individuals to spend less on consumption goods.
D. individuals to spend less on capital goods.
B. firms to invest more in new factories and working capital.
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The largest percentage of banks' holdings of securities consist of
A) Treasury and government agency securities. B) tax-exempt municipal securities. C) state and local government securities. D) corporate securities.
The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes $350 per month as the legal maximum rent, deadweight loss occurs because
A) consumers place a greater value on the last apartment unit than the cost to supply it. B) the supplier of the last apartment unit receives a rental price that is less than the marginal cost of supplying it. C) the quantity of apartments supplied has decreased. D) All of the above.
According to the law of diminishing marginal product, if all the inputs to a firm are increased in equal proportions, a. output will increase more than in proportion to the increase in the inputs
b. output will increase less than in proportion to the increase in the inputs. c. output will increase exactly in proportion to the increase in the inputs. d. The law of diminishing returns says nothing about what will happen to output when all inputs are increased in equal proportions.
The time it takes to recognize a recession and implement a spending stimulus is called a
A. fiscal drag. B. multiplier. C. retroactivity. D. lag.