Author Question: Which of the following is NOT true of the interest rate channel? A) Bank loans play no special ... (Read 130 times)

Pea0909berry · **on:** Jun 30, 2018

Which of the following is NOT true of the interest rate channel?

A) Bank loans play no special role.
B) The Fed changes the real interest rate which affects the components of aggregate expenditures.
C) Borrowers are indifferent as to how and from whom they raise funds.
D) Alternative sources of funds are not substitutes for each other.

Question 2

With a linear production function in labor only, which of the following must be true?

A) The representative household works as much as possible.
B) The representative firm makes large profits.
C) The real wage equals total factor productivity.
D) The marginal product of labor exceeds the real wage.