Suppose households decide to reduce savings because they want to enjoy more present time than future time. In this case, the loanable funds model predicts that
A) interest rate goes down, and quantity of borrowed funds increases.
B) interest rate goes down, and quantity of borrowed funds decreases.
C) interest rate goes up, and quantity of borrowed funds decreases.
D) interest rate goes up, and quantity of borrowed funds increases.
C
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Some illegal immigrants move back and forth across the U.S.-Mexican border. But in 2012, as many as _____ million immigrants were residing continuously in the U.S.
A. 4 B. 11 C. 20 D. 29
If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms
A) the economy is at full employment. B) there is a shortage of labor. C) the real wage rate will fall to restore equilibrium. D) actual real GDP equals potential GDP because firms make the decision about how many workers to hire.
Ricky is thinking about borrowing $10,000 from Fred. He promises Fred cash flows of $5000 for the next three years. If Fred's cost of capital is 10%, what is the present value of the stream of cash flows?
a. $9873.45 b. $12,434.26 c. $11,342.76 d. $8677.69
The Coase solution to the problem of externalities
a. applies in every situation where externalities are present b. only applies to activities that generate positive externalities c. only works under perfect competition d. only works when bargaining costs are low e. can lead to an increase in the common pool problem