According to the interest rate effect, a decrease in the price level will
A) decrease the real value of money balances, which causes total planned real expenditures to increase.
B) cause interest rates to fall, which generates an increase in borrowing, so that total planned real expenditures increase.
C) lead to a decrease in net exports, which causes total planned real expenditures to decrease.
D) increase the real value of money balances, which causes interest rates to increase, thereby reducing total planned expenditures.
B
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As the economy recovers from a recession, we should expect that demand for
a. inferior goods will fall and demand for non-inferior goods will rise b. all goods will rise c. inferior goods will rise and demand for non-inferior goods will fall d. all goods will fall e. complements will fall
The usual shape for a labor supply curve is
a. horizontal b. vertical c. dependent on the particular industry d. downward sloping e. upward sloping