If net foreign investment is positive, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)
A) Net exports are negative.
B) Capital outflows are less than capital inflows.
C) Domestic investment must be less than national saving.
D) None of the above are true when net foreign investment is positive.
C
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The substitution effect of a decrease in the wage rate causes the quantity of labor supplied to
a. increase b. increase only if the individual desires more leisure time c. increase only if the substitution effect outweighs the income effect d. decrease e. decrease only if the individual lowers the value of leisure time
An unanticipated increase in the money supply will lead to
a. a decline in interest rates, an increase in investment, and an increase in aggregate demand. b. a decline in interest rates, a decrease in investment, and an increase in aggregate demand. c. a decline in interest rates, an increase in investment, and a decline in aggregate demand. d. an increase in interest rates, an increase in investment, and an increase in aggregate demand. e. a decline in interest rates, a decline in investment, and a decline in aggregate demand.