Which of the following occurs as the economy moves leftward along a given IS curve?
A) An increase in the interest rate causes investment spending to decrease.
B) An increase in the interest rate causes money demand to increase.
C) An increase in the interest rate causes a reduction in the money supply.
D) A reduction in government spending causes a reduction in demand for goods.
E) An increase in taxes causes a reduction in demand for goods.
A
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If an Atlanta bakery raises the price of their rye bread by 11 percent and the quantity demanded decreases by 11 percent, then the demand for the rye bread is ________ and the bakery's total revenue ________
A) unit elastic; does not change B) unit elastic; increases C) unit elastic; decreases D) elastic; does not change E) inelastic; does not change
The higher the concentration ratio is in an industry, the more likely it is that
A) the industry is perfectly competitive. B) the market share of the smallest four firms is larger. C) the market share of the largest four firms is smaller. D) the industry has an oligopoly.
A ____ is a type of derivative in which the seller promises to pay the buyer of a particular security the value of that security if it goes into default.
A. credit default swap B. derivative C. mortgage-backed security D. futures contract
Explain what is meant by "derived demand" as it relates to factors of production