U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the ________ part of one of the two big economic questions.
A) what
B) how
C) when
D) how many
Question 2
Suppose the current real interest rate is 4 percent and the equilibrium real interest rate is 3 percent. Then
A) prices rise and inflation occurs.
B) there is a surplus of loanable funds.
C) there is a shortage of loanable funds.
D) there is neither a shortage nor surplus of loanable funds.
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