Author Question: An automobile manufacturer decides to increase its retained earnings. Assuming all else equal, this ... (Read 51 times)

shofmannx20 · **on:** Jun 30, 2018

An automobile manufacturer decides to increase its retained earnings. Assuming all else equal, this will cause:

A) a downward movement along the current credit supply curve of the firm.
B) the current credit supply curve of the firm to shift to the left.
C) the current credit supply curve of the firm to shift to the right.
D) an upward movement along the current credit supply curve of the firm.

Question 2

Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?

A) The increased amount of public goods will crowd out privately produced goods.
B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur.
C) The interest rate will decrease, leading to an increase in investment and capital formation.
D) Demand and supply of credit will increase.