Which of the following statements is true?
A. The total demand for money is directly related to the interest rate.
B. A lower interest rate raises the opportunity cost of holding money.
C. The supply of money is directly related to the interest rate.
D. Bond prices and the interest rate are inversely related.
Answer: D
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The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved. B) can be achieved by giving paper producers a subsidy. C) can be achieved by imposing a Pigovian tax on paper producers. D) cannot be achieved.
Over a decade or longer, a government budget deficit
A) reduces national saving and stimulates economic growth. B) reduces national saving and economic growth. C) increases national saving and economic growth. D) increases national saving and decreases economic growth.