This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If the real interest rate falls, people decide to ________ because the opportunity cost of ________. ... (Read 142 times)

formula1

  • Hero Member
  • *****
  • Posts: 666
on: Jun 29, 2018
If the real interest rate falls, people decide to ________ because the opportunity cost of ________.
 
  A) decrease their consumption expenditure; consumption has decreased
  B) increase their consumption expenditure; consumption has decreased
  C) increase their consumption expenditure; saving has decreased
  D) save more; saving has decreased
  E) None of the above answers is correct.

Question 2

How does a cut in interest rates that increases investment affect the quantity of real GDP demanded, the aggregate demand curve, real GDP, and the price level?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

rleezy04

  • Sr. Member
  • ****
  • Posts: 322
Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

The increase in investment increases the aggregate quantity demanded and shifts the AD curve rightward. As a result, the equilibrium price level rises and the equilibrium real GDP increases.


formula1

  • Member
  • Posts: 666
Reply 2 on: Jun 29, 2018
:D TYSM

cam1229

  • Member
  • Posts: 329
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Normal urine is sterile. It contains fluids, salts, and waste products. It is free of bacteria, viruses, and fungi.

Did you know?

The term pharmacology is derived from the Greek words pharmakon("claim, medicine, poison, or remedy") and logos ("study").

Did you know?

Allergies play a major part in the health of children. The most prevalent childhood allergies are milk, egg, soy, wheat, peanuts, tree nuts, and seafood.

Variation in the rate of evolution as a function of the strength of selection, assuming genetic drif Variation in the rate of evolution as a function of the strength of selection, assuming genetic drif
Earth Affects People; People Change Earth Earth Affects People; People Change Earth
How to calculate credit card interest when the interest is compounded How to calculate credit card interest when the interest is compounded
How to use the discriminant to determine the value of k in a quadratic with one real root How to use the discriminant to determine the value of k in a quadratic with one real root
People are living longer today than in previous decades People are living longer today than in previous decades
A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ... A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ...
Video: Molecules, Membrane Permeability and Structure

For a complete list of videos, visit our video library