Why does the economy's aggregate demand curve have a negative slope?
At higher price levels, the quantity of bank reserves demanded is greater. If the Fed holds the supply schedule fixed, a higher price level must therefore lead to higher interest rates. Because higher interest rates discourage investment, aggregate quantity demanded is lower when the price level is higher?that is, the aggregate demand curve has a negative slope.
Economics
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An employee gains $500 from shirking. Thus, to deter shirking, the employer makes employees post a bond equal to $1,000, and installs monitoring devices to detect shirking. What is the probability that these devices can detect shirking?
A) 30% B) 100% C) 50% D) 95%
Economics
Why is the interest rate on U.S. Treasury securities lower than on other types of bonds?
What will be an ideal response?
Economics