Falling interest rates can A) raise the cost of buying new ...

[littleanan]

Falling interest rates can
 
  A) raise the cost of buying new homes and fewer new homes will be purchased.
  B) lower the cost of buying new homes and fewer new homes will be purchased.
  C) raise the cost of borrowing for firms and decrease investment.
  D) increase a firm's stock price, which causes firms to issue more stock shares, and thus increases funds for investment.

Question 2

Suppose real GDP is 12.6 trillion and potential GDP is 12.4 trillion. To move the economy back to potential GDP, Congress should
 
  A) raise taxes by 200 billion.
  B) lower government purchases by an amount less than 200 billion.
  C) lower government purchases by 200 billion.
  D) raise taxes by an amount more than 200 billion.
  E) lower taxes by 200 billion.

[trog]

Answer to Question 1

D

Answer to Question 2

B

[littleanan]

Correct answers!

[trog]

Great! Please up vote