If in the past Congress had taken additional actions to make saving more rewarding, then today it is likely that the equilibrium interest rate
a. and the equilibrium quantity of loanable funds both would be lower.
b. and the equilibrium quantity of loanable funds both would be higher.
c. would be higher and the equilibrium quantity of loanable funds would be lower.
d. would be lower and the equilibrium quantity of loanable funds would be higher.
d
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After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily
A) shifted inward, toward the origin. B) shifted outward, away from the origin. C) became flatter. D) became steeper.
_________________—a term referring to the percentage change in the quantity of savings divided by the percentage change in interest rates.
a. Cross-price elasticity of demand b. Income elasticity of demand c. Elasticity of savings d. Wage elasticity of labor supply
Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession?
a. A cut in the marginal tax rate increases the incentives to find a job and work longer hours. b. Consumers will save a portion of a tax cut. c. The government may use the increase in expenditures on projects with little value, particularly if it wishes to respond quickly. d. There is no evidence that tax cuts have been followed by increases in economic growth.
How is the sacrifice ratio measured? How big is the sacrifice ratio in the United States? In other countries? What problems are there in measuring the sacrifice ratio?
What will be an ideal response?