A rise in interest rates leads to:
a. an increase in the PDV of profits from owning a machine.
b. a decrease in the PDV of profits from owning a machine.
c. offsetting the effects on the costs and benefits of owning a machine.
d. no effect on either the costs or benefits of owning a machine.
b
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
________ is a situation in which a good or service is produced at the lowest possible cost
A) Equity B) Allocative efficiency C) Productive efficiency D) Optimal marginalism
Sometimes ignoring that money is fungible can be:
A. useful and help someone stay on budget. B. irrational and lead to costly decisions. C. Both of these are true. D. Neither of these is true.
If the recessionary GDP gap is $500, then the proper fiscal stimulus when faced with an upward-sloping AS curve is to
A. Shift the AS curve rightward by less than $500. B. Shift the AD curve rightward by $500. C. Shift the AD curve leftward by $500. D. Shift the AD curve rightward by more than $500.