If business taxes are reduced and the real interest rate increases:
A. consumption and saving will necessarily increase.
B. the level of investment spending might either increase or decrease.
C. the level of investment spending will necessarily increase.
D. the level of investment spending will necessarily decrease.
B. the level of investment spending might either increase or decrease.
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How will the exchange rate (foreign currency per dollar) respond to an increase in preference for imported goods in the United States in the long run?
A) Exchange rates will be unaffected by changes in the relative rate of productivity growth in the United States, both in the short run and in the long run. B) Exchange rates will fall. C) Exchange rates will rise. D) The exchange rate will be affected in the short run, but not in the long run.
When American companies buy office buildings in Australia, they are generating a
A. Demand for U.S. dollars and a demand for a foreign currency. B. Supply of U.S. dollars and a supply of a foreign currency. C. Supply of U.S. dollars and a demand for a foreign currency. D. Demand for U.S. dollars and a supply of a foreign currency.