Holding all other things constant, when the price level falls, interest rates:
a. rise and firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding.
b. rise and firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding.
c. falls and firms want to borrow less for new plants and equipment and households want to borrow more for homebuilding.
d. falls and firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding.
d
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Economic growth due to labor force expansion or capital investments will result in I. A leftward shift of short-run aggregate supply. II. A rightward shift in long-run aggregate supply
A) I only B) II only C) Both I and II D) Neither I nor II
An increase in quantity demanded of a good is caused by
A. a change of tastes. B. a decrease in the price of a substitute. C. a decrease in the price of the good. D. a decrease in income.