If a nation experiences severe drought and real risk-free interest rate rises, then:
a. Aggregate demand rises, and aggregate supply falls.
b. Aggregate demand rises, but aggregate supply does not change.
c. Aggregate demand and aggregate supply fall.
d. Neither aggregate demand nor aggregate supply change.
e. None of the above.
.C
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U.S. exports of goods and services flow to households and firms in ________, and U.S. financial inflows of capital flow to households and firms in ________
A) the rest of the world; the United States B) the rest of the world; the rest of the world C) the United States; the United States D) the United States; the rest of the world E) the United States; the rest of the world and the United States
Suppose that expected profit decreases. This change means
A) the demand curve for loanable funds shifts leftward and the real interest rate falls. B) the supply curve for loanable funds shifts rightward and the nominal interest rate rises. C) there is a movement down along the demand curve for loanable funds. D) the real interest rate rises as saving increases.