Author Question: Other things being equal, what is the effect of deficit spending on interest rates? A) Interest ... (Read 115 times)

tichca · **on:** Jun 29, 2018

Other things being equal, what is the effect of deficit spending on interest rates?

A) Interest rates decline.
B) Interest rates rise.
C) Interest rates hold constant because the demand for credit decreases.
D) There is no impact unless the Federal Reserve decides to alter the money supply.

Question 2

Prices provide the rationing function best when

A) prices are flexible.
B) prices are inflexible.
C) they are used in conjunction with queuing.
D) price controls are in place and ration coupons are used too.