Suppose the Federal Reserve decides to increase the money supply. Which of the following predicts the most likely results? Interest rates will rise, meaning that banks will give fewer loans and prices for goods and services will fall. Interest rates will fall, meaning that banks will give more loans and more businesses can open and hire workers. Interest rates will fall, meaning that prices will rise and businesses will not hire many workers. Interest rates will rise, meaning that more people will buy goods and services and prices will rise.
A marketing company makes the following statements in a television commercial about advertising in social media websites: "75% of consumers are influenced to buy a product AFTER asking for advice on social media networks… Over half of 25 to 34-year-olds who use social media say they can’t live without their social media sites!" What is the main purpose of these statements in the marketing company's commercial? To motivate 25 to 34-year-olds to log on to their favorite social media site To show businesses that advertising in social media can increase profits To increase competition between social media sites for new subscribers
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For 1, I think c because money will not be scarce, so its price will fall. And if the interest rate is the value of money, it has the same change. It also reflects the cost of borrowing, so consumers will more likely loan from banks, and businesses can invest more without laying off workers to not lose profit.
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