Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories

If the level of interest rates increases, then the current value and price of a bond paying a fixed interest payment will

A) remain unchanged since its underlying value, the interest payment is fixed. B) fall since new bonds offer higher rates. C) rise since new bonds offer higher rates. D) first rise then fall as bond investors calculate the effects of the change in rates.

Suppose Berylia's marginal propensity to consume is 0.8 . A recessionary gap of $200 exists in this economy. In order to close this gap, the government should increase its aggregate expenditures by _____

a. $40 b. $100 c. $200 d. $80