1. A decrease in the real interest rate will liekly to lead to a. Less preven co
ID: 1098218 • Letter: 1
Question
1. A decrease in the real interest rate will liekly to lead to
a. Less preven consumption in favor of future consumption
b. An outward shift in the intertemporal production prssibility frontier
c. An inefficient use of resources available for present and future consumption
d. less future consumption in favor of preseent consumption
2
Take a look at the graph to the right It depicts an economy. Home, and its production possibilities frontier (TT) that indicates various combinations of flowers are computers chat it can produce. Assume that flowers are labor intensive and that computers are technology intensive. Home currently exports Originally the Home economy produced along TT. Home then experienced growth that caused its PPF to shift toTTz Which of the following is a plausible description of the growth experienced by the Home economy? There has been a reduction in the amount of labor available to the Home economy. The prices of computers fell, so Home can now produce more of them. There has been a technological development in the production of computers There has been a technological development in the production of flowers Computer productionExplanation / Answer
1) a decrease in real interest rate will increase the current consumtion and increases the aggregate demand;
Thus, the correct answer is answer D.
2) An outward shift in the PPF curve is a resultant of a technological advancement.
Thus the correct option is C
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.