When the federal government borrows money, the resulting ________ in interest rates will lead private investment to ________.
A. increase; rise
B. increase; fall
C. decrease; fall
D. decrease; rise
Answer: C
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Refer to Figure 9-5. Without the tariff in place, the United States produces
A) 12 million pounds of coffee. B) 26 million pounds of coffee. C) 33 million pounds of coffee. D) 45 million pounds of coffee.
An decrease in the velocity of money for given levels of income and the interest rate would shift the
a. LM curve up. b. IS curve up. b. IS curve down. c. LM curve down.
Which of the following is the most likely response to a decrease in the U.S. real interest rate?
a. a U.S. company decides to expand its factory b. a U.S. citizen decides to purchase fewer foreign bonds c. a German mutual fund decides to increase its deposits at a U.S. bank d. All of the above are consistent.
Mutual funds are attractive because:
A. they usually have inside information because they run most of the companies they invest in. B. they have inside information that is not available to other investors. C. they provide high returns from purchasing the financial securities of a few select companies. D. they provide the investor with greater diversification at a lower cost than what most investors could obtain individually.