What will be the effects of an increase in real output on the interest rate?
What will be an ideal response?
An increase in real output will increase the interest rate. If investment depends only on interest rate, this will cause investment to go down. The increases interest rate will cause an appreciation of the dollar.
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If the price of a good falls, before the amount consumed changes the marginal utility per dollar from that good
A) decreases. B) increases. C) might either increase or decrease depending on whether the good is a substitute or a complement. D) More information is needed to determine the answer.
Automatic stabilizers refer to
A) changes in the money supply and interest rates that are intended to achieve macroeconomic policy objectives. B) the money supply and interest rates that automatically increase or decrease along with the business cycle. C) changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives. D) government spending and taxes that automatically increase or decrease along with the business cycle.