The interest rate effect operates through
A. the purchasing power of individuals' checking accounts.
B. government spending levels.
C. labor supply.
D. credit markets by changing borrowing costs.
Answer: D
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To determine whether McDonald's hamburgers are in the same market as Domino's pizza, the criterion we use is their
a. price elasticities of demand b. price elasticities of supply c. income elasticities of demand d. cross elasticities e. equilibrium prices
Taxes are the difference between
A. GDP and net exports. B. GDP and consumer spending. C. consumer spending and saving. D. GDP and disposable income.
Classical economists believe that:
A. velocity is not constant. B. changes in the money supply affect real GDP. C. the quantity of money explains prices. D. the money supply affects velocity.
The balance of payments is made up of three accounts: the merchandise trade account, the service account, and the investment income account.
Answer the following statement true (T) or false (F)