Sarah is a high school graduate and James is a college graduate. Which of the following statements is true?
A) Sara is likely to have more human capital than James.
B) James is likely to have more human capital than Sara.
C) Both Sara and James are likely to earn the same wage in the labor market.
D) Both Sara and James are likely to have the same amount of human capital.
B
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According to the interest rate effect, a decrease in the price level will
A) decrease the real value of money balances, which causes total planned real expenditures to increase. B) cause interest rates to fall, which generates an increase in borrowing, so that total planned real expenditures increase. C) lead to a decrease in net exports, which causes total planned real expenditures to decrease. D) increase the real value of money balances, which causes interest rates to increase, thereby reducing total planned expenditures.
An interest rate spread is the difference between an interest rate on a risky asset and the corresponding interest rate on a risk-free treasury security.
Answer the following statement true (T) or false (F)