Suppose that along the economy-wide rate-of-return line, the current interest rate of 8 percent causes a planned investment of $300 billion
Should the interest rate fall to 7 percent, the $300 billionth dollar of investment spending now generates a ________ rate of profit, which puts ________ pressure on investment. A) positive, downward
B) positive, upward
C) negative, downward
D) negative, upward
B
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Which of the following Fed actions would both increase the money supply?
a. buy bonds and raise the reserve requirement b. buy bonds and lower the reserve requirement c. sell bonds and raise the reserve requirement d. sell bonds and lower the reserve requirement
In the figure above, suppose that Mac and Izzie specialize and trade to reach point c. Mac sends Izzie
A) 12 computers in exchange for 12 TVs. B) 12 computers in exchange for 6 TVs. C) 6 computers in exchange for 12 TVs. D) 6 computers in exchange for 6 TVs.