Suppose Japanese Real Interest Rates Fall

question 107

Multiple Choice

Suppose Japanese real interest rates fall.Typically,we should expect a ____________ shift of the U.S.AD curve with a ___________________ shift in United States real interest rates.

• A)rightward;larger
• B)rightward;smaller
• C)leftward;larger
• D)leftward;smaller

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Definitions:

Equilibrium Quantity

The quantity of goods or services demanded equals the quantity supplied at the market price.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific time frame.

Tariff

Tariff is a tax imposed on imported goods and services to regulate trade and to increase government revenue.