In Figure 4-5 above, at what income would the interest rate that brings about money market equilibrium cause unwanted inventories of commodities to accumulate?
A) YA
B) YB
C) YE
D) YC
D
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What determines the supply of loanable funds and what makes it change?
What will be an ideal response?
The monetary base is defined as
A) bank reserves plus currency held by the nonbank public. B) bank reserves minus vault cash. C) all deposits at the Fed. D) deposits at the Fed plus vault cash.
During the recession phase of the business cycle, business firms become pessimistic about their future earning capacity as do banks. Nominal interest rates fall during recessions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest payments. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest payments.
Existing loopholes erode the progressivity of the U.S. tax system
a. True b. False Indicate whether the statement is true or false