At higher rates of interest
A) businesses demand more investment because there are more funds available to invest.
B) businesses demand more investment because future profitability is likely to be greater.
C) households save more because they get a greater return on their savings.
D) households save less because it is more expensive to save.
C
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According to this Application, why is the value of Wal-Mart's 2014 sales NOT an accurate measurement of its actual sales impact on the U.S. economy?
A) The sales figure includes the value of purchases from other firms. B) The sales figure did not account for chain-weighted inflation measurements. C) The sales figure was in nominal, not real, dollars. D) The sales figure did not take into account the recession of 2008.
According to the Taylor Rule: if the inflation rate is 2% and the GDP gap is 3%, what does the federal funds rate target equal?
A) 9.5 percent B) 7.5 percent C) 5.5 percent D) 8.5 percent