There Are No Idle Resources,the Multiplier Is Operative,and Autonomous Spending

question 120

Multiple Choice

There are no idle resources,the multiplier is operative,and autonomous spending rises.It follows that

• A) Real GDP will not increase.
• B) Real GDP will rise.
• C) prices will rise.
• D) a and c
• E) a,b,and c

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Definitions:

Discount Rate

The rate of interest imposed on loans obtained by commercial banks and other depository institutions from the Federal Reserve's discount window.

Actual Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, taking into account the effects of compounding.

Non-Interest-Bearing Note

A financial instrument or promissory note that does not accrue interest over time, meaning the borrower repays only the principal amount.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a country's central bank.