1.When the U.S. real interest rate rises ________.
U.S. dollar assets earn a higher return relative to foreign assets
makes U.S. exports cheaper in foreign currencies
imports will decrease
All of these
None of these
2. An increase in the real interest rate will cause an increase in ________.
saving
planned investment
net exports
All of these
None of these
3. IS Curve Exogenous Variables and Parameters
Given the values in the table above, the real interest rate r = ________ when equilibrium output Y = 15.
9.8
5
3.18
10
None of these
4. Investment spending ________.
is comprised of fixed and inventory investment
is negatively related to the real interest rate
is heavily influenced by what Keynes coined as "animal spirits"
All of these
None of these
5. If disposable income falls, consumption expenditure falls ________.
by an amount that depends on the real interest rate
so that planned expenditure remains constant
by an amount smaller than the decrease in disposable income
All of these
None of these