Answer
option 3
increases one-for-one with an increase in government spending.
the demand for good increases given real interest rate is one for one with government spendings as the government sending increases demand with the multiplier effect eventually but there is a price effect higher than it so at the same real interest rate it increases one for one.
Question 30 2 pts The demand for goods, given the real interest rate o increases less...
If government spending increases then, given the real interest rate, Question 16 options: 1) the demand for goods increases more than one-for-one. 2) the demand for goods increases less than one-for-one. 3) the demand for goods is unchanged, due to crowding out. 4) the demand for goods increases one-for-one. 5) the demand for goods doubles.
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
4. Assume that the equilibrium in the loanable funds market is at interest rate of 1.25% and quantity of funds at $20 billion. Suppose the current government deficit is zero so government is not borrowing any money. a) Suppose now government increases spending by $2 billion and finances it entirely by borrowing. This deficit increases equilibrium interest rate to 2% and equilibrium quantity of funds to $21.5. Show the changes on the graph. b) What happens to private investment (I)...
4. Assume that the equilibrium in the loanable funds market is at interest rate of 1.25% and quantity of funds at $20 billion. Suppose the current government deficit is zero so government is not borrowing any money. a) Suppose now government increases spending by $2 billion and finances it entirely by borrowing. This deficit increases equilibrium interest rate to 2% and equilibrium quantity of funds to $21.5. Show the changes on the graph. b) What happens to private investment (I)...
This Question: 2 pts < 26 of 64 (10 complete) Real wage rate (2000 dollars per hour Draw a labor supply curve and a labor demand ourve. Label them LS, and LD Draw a point the equilibrium quantity of labor and the equilibrium real wage rate. Labelt 1. Draw and label a curve that shows the effect of an increase in labor productivity Draw a point at the new equilibrium quantity of labor and the equilibrium real wage rate Labelit...
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7. Given the expected rate of return on all possible investment opportunities in the economy, a(n) B. decrease in the real rate of interest will tend to increase the level of investment. C. decrea A. increase in the real rate of interest will tend to increase the level of investment. se in the real rate of interest will tend to decrease the level of investment. D. change in the real interest rate will have no...
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QUESTION 14 The discount rate is the interest rate that O the Fed charges on loans made to the government. O member banks charge on loans made to the Fed. O the government charges on loans made to the Fed. the Fed charges on loans made to member banks. QUESTION 15 The slope of the aggregate demand curve indicates that, as the price level increases, O the aggregate demand curve shifts rightward. O the real GDP demanded decreases....
Question 11 pts Which of the following describes inflation? It increases the real value of anything expressed in dollars. It means that the price of every good and service is rising. It is an increase in the cost of a given basket of goods. It can occur only when many goods are falling in price. Flag this Question Question 21 pts David’s pay last year was $100,000. His pay this year increased to $115,000. The consumer price index increased from...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium interest rate in the goods market, then total demand for goods is A. higher than the total supply. B. lower than total supply. C. can be equal to total supply. D. none of the above. QUESTION 21 In the classical model, if total demand for goods is less than total supply, then real interest rate will A. fall. B. rise. C. may remain the...
When drawn against the real interest rate, the output demand curve shifts to the right when Question 15 options: 1) current capital stock decreases. 2) current capital stock increases. 3) real wage rate decreases. 4) real wage rate increases. 5) current capital stock and real wage rate increases.