During the expansion phase of the business cycle, business firms become optimistic about their future earning capacity as do banks. Nominal interest rates rise during expansions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest rates.
B) stay the same.
C) fall.
D) fall if the change in future earnings is thought to be greater than the change in interest rates.
A
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Regarding the role of saving in economic growth, studies indicate that
A) there is both a positive and a negative relationship between economic growth and saving. B) there is a positive relationship between economic growth and saving. C) there is a negative relationship between economic growth and saving. D) there is no relationship between economic growth and saving.
Other things equal, if Mexico devotes more resources to train its population than Spain,
A) Mexico will be able to eliminate scarcity faster than Spain. B) Mexico will grow faster than Spain. C) Mexico will be able to eliminate opportunity cost faster than Spain. D) Mexico will have more current consumption than Spain. E) Spain will grow faster than Mexico.