Interest rates adjusted for the effects of inflation are real variables, inflation is a nominal variable. and inflation are real variables. and inflation are nominal variables. are nominal variables, inflation is a real variable. Suppose a country has only a sales tax. Now suppose it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium Interest rates fall and the equilibrium quantity of loanable Funds rise. interest rates and the equilibrium quantity of loanable funds fall interest rates and the equilibrium quantity of loanable funds rise. interest rates rise and the equilibrium quantity of loanable funds fall. Which of the following events could explain an increase in interest rates together with a decrease in investment? The government instituted an investment tax credit None of the others is correct. The government reduced the tax rate on savings. The government went from surplus to deficit

Interest rates adjusted for the effects of inflation are real variables, inflation is a nominal variable. and inflation are real variables. and inflation are nominal variables. are nominal variables, inflation is a real variable. Suppose a country has only a sales tax. Now suppose it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium Interest rates fall and the equilibrium quantity of loanable Funds rise. interest rates and the equilibrium quantity of loanable funds fall interest rates and the equilibrium quantity of loanable funds rise. interest rates rise and the equilibrium quantity of loanable funds fall. Which of the following events could explain an increase in interest rates together with a decrease in investment? The government instituted an investment tax credit None of the others is correct. The government reduced the tax rate on savings. The government went from surplus to deficit

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

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