With an increase in the real interest rate, consumption and real gross domestic product will most likely change in which of the following ways?

A) Increase/Increase
B) Increase/Decrease
C) Decrease/Increase
D) Decrease/Decrease
E) No change/Increase

Ans: D) Decrease/Decrease

Economics

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Which of the following is a macroeconomic question?

A) Why did a leading computer manufacturer establish call centers in India? B) Should the government put a tax on alcohol in an attempt to assist in the funding of support groups like Alcoholics Anonymous? C) Should we have a constitutional amendment requiring the government to implement a national consumption tax to replace the current income tax? D) Why does a pharmaceutical manufacturer try to lower its production costs?

Economics

What is the rationale behind a tradable emission allowance scheme?

A) to create a market for externalities: the scheme brings together buyers and sellers of marketable permits B) to discipline polluting firms by specifying the maximum amount of emissions allowed and giving them permits to pollute up to their allowance C) to raise revenue for the government through the sale of emission permits and at the same time set an emissions target D) to provide firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance

Economics