Assume the central bank decides to raise the discount rate. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the right.
b. Start the analysis in the real credit market with demand for real credit shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the right.
d. Start the analysis in the real credit market with supply of real credit shifting to the left.
e. Start the analysis in the real credit market with supply of real credit shifting to the right.
.D
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Marginal cost:
a) is always less than price. b) is the minimum price a producer to cause him to offer one more unit of a good for sale. c) decreases as more is produced. d) may be negative. e) is greater than price
The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between
A) the future production of capital goods and future consumption of goods. B) economic growth and technological change. C) satisfying today the needs of the poor and the wants of the wealthy. D) current consumption and future consumption.