The combined effect on the loanable funds market of a new technology that increases the marginal physical product of capital and a shift in consumers' expectation of future prices, now expecting they will be lower than they earlier expected, is a(n)
a. increase in the interest rate
b. decrease in the interest rate
c. decrease in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change
d. increase in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change
e. shift in the demand curve to the left and the supply curve of loanable funds to the right
D
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For movements along the long-run aggregate supply curve
A) potential GDP is dependent on the price level. B) the prices of goods and services change while the prices of productive resources hold steady. C) the price level and the money wage rate change by the same percentage. D) All of the above are correct.
Figure 6-1
illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. Programs that give subsidies to a small group of producers at general taxpayer expense would be considered
a.
type A projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.
b.
type B projects, and the government would be likely to undertake many of these projects even when they were counterproductive (inefficient).
c.
type C projects, and the government would be likely to fail to undertake many of these projects even when they were productive (efficient).
d.
type D projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.