Lower inflation is usually accompanied by
a. lower nominal interest rates
b. lower real interest rates
c. higher nominal interest rates
d. higher real interest rates
e. zero real interest rates
D
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One point on a PPF shows production levels at 50 tons of coffee and 100 tons of bananas. Remaining on the PPF, an increase of banana production to 140 tons shows coffee production at 30 tons
Still remaining on the PPF, coffee production at 10 tons allows banana production at 160 tons. The opportunity cost of a ton of bananas is A) constant because coffee production decreased by the same amount each time. B) decreasing, since the increase in banana production is less at each point considered. C) 16 to 1, that is every 1 ton of coffee given up will result in 16 more tons of bananas. D) increasing from 1/2 ton of coffee per ton of bananas to 1 ton of coffee per ton of bananas.
If the marginal propensity to consume in an economy is .8, net exports are zero, and government spending is $33 billion at each level of real GDP, the slope of the economy's aggregate expenditures schedule will be:
A. .8. B. .2. C. 5. D. .125.