An increase in the domestic interest rate relative to other ...

[bobypop]

An increase in the domestic interest rate relative to other interest rates should
 
  A) increase net exports. B) increase investment spending.
  C) decrease consumption spending. D) increase government spending.

Question 2

Suppose Congress increased spending by 100 billion and raised taxes by 100 billion to keep the budget balanced. What will happen to real equilibrium GDP?
 
  A) There will be no change in real equilibrium GDP.
  B) Real equilibrium GDP will fall.
  C) Real equilibrium GDP will rise.
  D) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium value.

[jaaaaaaa]

Answer to Question 1

C

Answer to Question 2

C

[bobypop]

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