Which of the following statements would be true of an economy that can be characterized as being to the left of the IS curve?
A) There is an excess demand for commodities at the existing interest rate.
B) There will be a tendency for the level of output to decrease.
C) There is an excess supply of commodities at the existing interest rate.
D) There will be a tendency for interest rates to fall.
A
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Refer to the scenario above. Which of the following will happen in equilibrium if the game is played only once?
A) Social surplus will be maximized. B) Tom will trust Harry and Harry will defect. C) Tom will trust Harry and Harry will cooperate. D) Neither of them will make any money.
(Advanced analysis) If the equation C = 20 + .6Y, where C is consumption and Y is disposable income, were graphed:
A. the vertical intercept would be +.6 and the slope would be +20. B. it would reveal an inverse relationship between consumption and disposable income. C. the vertical intercept would be negative, but consumption would increase as disposable income rises. D. the vertical intercept would be +20 and the slope would be +.6.