In the Keynesian system a drop in investment __________ cause the interest rate to __________
A) will; fall
B) will; rise
C) does not; rise
D) does not necessarily; fall
D
Economics
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Suppose a wave of investor and consumer pessimism causes a reduction in spending. If the Federal Reserve chooses to engage in activist stabilization policy, it should
A. decrease the money supply and increase interest rates. B. increase the money supply and decrease interest rates. C. decrease government spending and increase taxes. D. increase government spending and decrease taxes.
Economics
Four possibilities have probabilities 0.4, 0.2, 0.2 and 0.2 and values $40, $30, $20, and $10 respectively. The expected value is:
a. $22 b. $24 c. $26 d. $28
Economics