Why do U.S. government loans generally pay a low interest rate?
What will be an ideal response?
U.S. government bonds pay a low interest rate because the U.S. government is considered to be the safest borrower and most individuals believe that there is very little risk that the government will not repay its loans.
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If intended investment increases by $50, and the MPC remains unchanged at 0.75, then
a. the economy is in equilibrium at both levels of intended investment because MPC remains unchanged b. national income remains unchanged regardless of the change in intended investment c. MPS must increase from 0.25 to 0.75 d. national income increases by $200 e. we know this couldn't happen because the MPC cannot remain unchanged when intended investment changes
As the price level rises,
a. the exchange rate falls, so net exports fall. b. the exchange rate falls, so net exports rise. c. the exchange rate rises, so net exports fall. d. the exchange rate rises, so net exports rise.