A positive externality will cause a market to produce:
a. more than the efficient equilibrium output level.
b. iless than the efficient equilibrium output level.
c. the efficient equilibrium output level
d. None of the above.
b
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A lower interest rate makes more investment projects feasible, meaning that
a. there is a direct relationship between the rate of interest and the quantity of investment spending b. there is an inverse relationship between the rate of interest and the quantity of investment spending c. there is no relationship between the rate of interest and the quantity of investment spending d. the demand curve for investment spending is horizontal e. the demand curve for investment spending is vertical
GNP and GDP are important economic variables, because of their close association to:
a. Economic well-being and the exchange rate. b. Real interest rates and the nominal exchange rate. c. Nominal and real interest rates. d. Nominal interest rates and real exchange rates. e. Economic well-being and unemployment.