Which of the following events would most likely cause the nominal interest rate to fall?
a. A decrease in the supply of loanable funds
b. An increase in the demand for loanable funds
c. An increase in the supply of loanable funds and an increase in the demand for loanable funds
d. An increase in the supply of loanable funds and a decrease in the demand for loanable funds
e. A decrease in the supply of loanable funds and an increase in the demand for loanable funds
d
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During the first three years of a recovery from a recession, productivity
a. usually rises relatively rapidly. b. falls slowly. c. is quite puzzling since it is usually unpredictable with respect to the directional change. d. usually remains constant.
According to the substitution effect, if the price of a product goes down
A) the consumer will buy more of the good at the lower price than at a higher price, creating a downward sloping demand curve. B) the consumer will buy more of the good at a lower price than at a higher price, creating a horizontal demand curve. C) the consumer will not change the level of purchases of the good when the price changes, making the demand curve a vertical line. D) the real income of the consumer will increase, causing the consumer to want to buy more of the good, creating a downward sloping demand curve.