Increases in investment spending cause interest rates to increase. As a result,
a. households will demand more loanable funds
b. households will save a smaller fraction of their incomes
c. households will voluntarily decrease their consumption spending
d. the investment curve will shift leftward
e. firm will receive greater profits from households who are consuming goods
C
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Banks that wish to borrow required reserves can turn to the federal funds market
a. True b. False Indicate whether the statement is true or false
If a nonbinding price floor is imposed on a market, then the a. quantity sold in the market will decrease
b. quantity sold in the market will stay the same. c. price in the market will increase. d. price in the market will decrease.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same. b. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). c. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
External costs occur only with production and not consumption.
Answer the following statement true (T) or false (F)