During the 1987-88 expansion period interest rates in the United States rose as did the rate of investment in the economy. These facts suggest
A) the simple accelerator effect and the effects of higher interest rates complemented each other to raise output growth.
B) the simple accelerator effect and the effects of lower interest rates complemented each other to lower output growth.
C) the effects of the accelerator were greater than those of increased interest rates.
D) the effects of the accelerator were smaller than those of increased interest rates.
C
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Indicate whether the statement is true or false
Having worked for many of the firms in the petroleum industry, you know that the price elasticity of demand for a representative firm is about ?1.25. An industry publication recently reported that the Rothschild index for the petroleum industry is estimated to be 0.88. Based on this information, you know that the price elasticity of demand for the firm you currently work for in the petroleum industry is:
A. ?1.10. B. 1.10. C. ?1.42. D. 0.704.