Because of their effect on interest rates:
a. capital flows weaken monetary policy but strenghen fiscal policy
b. capital flows strengthen monetary policy but weaken fiscal policy
c. the initial effects of a fiscal expansion on aggregate demand are strengthened
d. the initial effects of a monetary contraction are weakened
b
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Which of the following correctly describes the Lorenz curve?
a. The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy. b. The Lorenz curve shows the growth rate in real median family income over time. c. The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution. d. The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society.
Which of the following would happen if a law were passed imposing a price ceiling that holds the interest rate charged on credit cards at a rate below the prevailing market rate?
a. The quantity demanded of credit card debt will decrease from its original level. b. The quantity supplied of credit card debt will increase from the original level. c. The quantity demanded will exceed quantity supplied. d. The quantity demanded and supplied of credit card debt would not change.