According to Classical Economists,if the Amount of Funds Households Save

question 165

Multiple Choice

According to classical economists,if the amount of funds households save is greater than the amount of funds firms invest,then

• A) the interest rate will fall,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
• B) the interest rate will rise,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
• C) the interest rate will remain constant and people will simply buy more goods.
• D) more money will he used for leisure purposes,since households save in order to consume leisure at some later time.
• E) none of the above

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Definitions:

Probability

A mathematical measure indicating the likelihood or chance of a specific event occurring, ranging from 0 (impossible) to 1 (certain).

Quarter

A period of three months used in financial and business sectors for reporting, forecasting, and dividing the fiscal year.

Tails

The extreme ends of a distribution, representing outcomes that are far from the central peak of the distribution.

Flipping

Flipping typically refers to buying assets, such as real estate or stocks, and quickly selling them for a profit.