An increase in real money balances resulting from a lower price level will:
A. increase both interest rates and investment.
B. reduce interest rates and increase investment.
C. reduce both interest rates and investment.
D. increase interest rates and reduce investment.
Answer: B
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Prices that adjust nearly on a daily basis are
A) heavy prices. B) sticky prices. C) auction prices. D) custom prices.
Which of the following can be a valid reason for Canada's GDP exceeding its GNP in 2001?
a. Net factor income from abroad in Canada was negative. b. Canada's GNP measurements were flawed. c. Canada's indirect business taxes were exceptionally high. d. The World Bank underestimated Canada's net exports. e. Canada's residents received more foreign aid than they could spend.
In a competitive industry, the industry's short-run supply curve is
A. the vertical sum of the marginal cost curves. B. the horizontal sum of the marginal cost curves. C. determined by the average variable cost curve. D. determined by the average total cost curve.
The Fed's low short-term interest rate policy of 2002 to 2004 encouraged decision makers to
A) make large down payments when purchasing housing. B) borrow more and increase their purchases of housing. C) borrow less and reduce their purchases of housing. D) purchase housing only if it could be financed with a 30-year, fixed interest-rate mortgage.