According to the Bureau of Economic Analysis, household disposable income fell by 0.3 percent of August, 2012. If all else remains the same, what is the likely impact of this fall on the real interest rate?
A) The real interest rate will rise.
B) The real interest rate will fall.
C) A change in household disposable income will have no impact on the real interest rate.
D) The impact on the real interest rate is ambiguous.
Question 2
If the nation's capital stock increases so that workers become more productive, the
A) demand for labor will increase.
B) supply of labor will increase.
C) demand for labor will decrease.
D) supply of labor will decrease.
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