Suppose many businesses want to increase their stock of capital goods and decide to borrow funds to do it. Which would be the likely result of this event?
A. Interest rates would increase
B. Interest rates would decrease
C. The equilibrium quantity of loanable funds would decrease
D. The equilibrium quantity of loanable funds would remain unchanged
A. Interest rates would increase
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Suppose the price of a DVD is $15 per unit. At that price, consumers wish to purchase 6,000 units weekly and producers wish to sell 4,000 units weekly. In this situation,
a. unsatisfied consumers will bid up the market price. b. the market price will fall because producers are unsatisfied. c. the price will rise and the demand will fall to bring the market to equilibrium. d. supply will increase by 2,000 units in order to satisfy consumers.
The cross-price elasticity of demand between good X and good Y is -3. Given this information, which of the following statements is true?
A. The demand for goods X and Y is elastic. B. Goods X and Y are complements. C. Goods X and Y are substitutes. D. The demand for goods X and Y is income elastic.