In the classical model with a closed economy, if the interest rate is too low, then investment is too compared to savings; as a result, the interest rate will O high; rise O high; fall O low; rise O low; fall

In the classical model with a closed economy, if the interest rate is too low, then investment is too compared to savings; as a result, the interest rate will O high; rise O high; fall O low; rise O low; fall

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Help me please
Use the Simple Classical Macroeconomic Model to answer this question. Suppose the economy enters a recession and the government decides to lower taxes to stimulate growth (from $3,500 to $3,000. What would happen to the level of GDP? a. 60,000 b. 16,500 c. 33,000 O d. 30,000
Increasing public savings in a closed economy usually leads to: O The aggregate demand is declining O The aggregate demand is going up O The trade balance is deteriorating O Private consumption is declining a lot
Consider a model economy in which each young person receives 200 units of the consumption good. There are 50 young people born each period. The total stock of fiat money is constant and equal to $10,00. Suppose a person's preferences are such that they only want to consume when old and they dislike risk. We assume the probability that a person moves is 10 percent. The gross return on capital is 1.10. A bank accepts deposits from all young people. a. What is the state contingent rate of return oşered by banks on deposits? b. Write down the money market-clearing condition for this economy. c. Compute the equilibrium value of money for this economy. [Champ, Bruce/Freeman, Scott/Haslag, Joseph. Modeling Monetary Economies]
1. Answer any 2 from a, b, and c below a. Why does AD slope downward? b. Which is the one example that is used in the video to explain changes in C, I, G, and NX? c. Which 2 forces are different in shifting AD?
Use the Solow Model to answer this question. Choose which is the correct Figure and explain why. Assume that at t-3, the saving rate INCREASES. Which of the following figures represent what would happen to the economy: Flow A Figure B C OP ARA LAKS WAM 813 19 Essure C CA C 4+3 Eigure D K #+3.M 2+3 Choose which is the correct Figure and EXPLAIN what happens (as a consequence of the shock): - in the long run: - in the short run ("same period of the shock"): - in the transition:
PartA
What name is given to the maximum quantity that an economy can produce given its existing levels of labor, physical capital, technology, and institutions? O O Potential GDP Cheese The Wealth Effect The Interest Rate Effect
Because of scarcity, people are more likely to do what? squander resources increase the profit margin use resources wisely The MOST important factor affecting consumer spending is O the level of current consumer debt O the amount of assets held by consumers such as homes, cars, stocks, or bonds the expectations of consumers of what the economy will be in the future © the level of current consumer income
Use the diagram below to answer the question. O A OF O C OE Which point corresponds to level of consumption and investment in the economy when private savings is equal to investment? OD O Hayekian Triangle B I SLF DLE S&I SLF + MS
Which of the following is not an argument by those who oppose tax-law changes to encourage saving? O A. Saving is not very responsive to changes in the tax rate. O B. Saving is not an important determinant of a nation's ability to produce output. OC. Reducing the budget deficit instead of changing the tax laws could raise saving. O D. Changes in the tax laws to induce saving would distribute the tax burden less fairly.
pls also do the graph