Suppose Congress enacts investment tax credits to spur more business investment. What impact would this have on the loanable funds market?
a) There would be an increase in supply; the supply curve shifts right.
b) There would be a decrease in supply; the supply curve shifts left.
c) There would be an increase in demand; the demand curve shifts right.
d) There would be a decrease in demand; the demand curve shifts left.
Ans: c) There would be an increase in demand; the demand curve shifts right.
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers
When Paul maximizes his profit, the difference between marginal cost and price is A) $0. B) $40. C) $60. D) $30. E) $20.
Traditional Keynesians tend to favor
a. monetary policy over fiscal policy because of the effectiveness of central banks. b. monetary policy over fiscal policy because it reduces interest rates.. c. fiscal policy over monetary policy because it doesn't impact interest rates. d. fiscal policy over monetary policy because of the liquidity trap. e. none of the above.