Suppose the U.S. interest rate is 6 percent and the world interest rate is 5 percent. The U.S. interest differential is

In the Classical view, rising interest rates reduce

A) government spending. B) saving. C) velocity. D) investment.

What, according to economist Donald Boudreaux in the "Last Word" section of the chapter, best explains why the market system is not a random, chaotic mess?

A. There is active cooperation among private property owners and government officials to correct the excesses of a market economy B. The roundabout methods of production allocate resources from consumers to producers in an orderly fashion C. Government planning limits the chaos, and the government regulates economic activity to create stability in the market D. Private property rights encourage mutual accommodation that leads to an arrangement of resources that is productive