Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate. What happens to supply of money if the interest rate increases?
a. It increases.
b. It decreases.
c. It does not change.
d. Uncertain-economic theory has no answer to this question.
c
You might also like to view...
In the early 1990s, some ________________ experienced inflation rates in the triple digits
a. of the newly emerging nations of Central Europe and the former Soviet Union b. East African nations c. Latin American nations d. Asian nations e. West African nations
Acme Home Builders, Inc, has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?
a. For the first 24 houses, the average cost per house was $205,000. b. The marginal cost of the 25th house, if it is built, will equal $250,000. c. If the company can sell the 25th house for at least $202,000 . then it should build it. d. All of the above are correct.