An increase in taxes (when Ricardian equivalence doesn't hold) causes the real interest rate to ________ and the price level to ________ in general equilibrium

The increase in spending that occurs because the demand for investment goods increases when the price level falls is known as the

A) price effect. B) international trade effect. C) wealth effect. D) interest rate effect.

Critically evaluate the following statement made in favor of the sub-prime loan bailout of mortgage companies who made high interest rate loans to marginal credit-worthy customers

"The government should do everything within its powers to prop up ailing lenders and homeowners, just as they've done in the past with other troubled industries, from airlines to savings and loans"