During a period of economic expansion, when expected profitability is high,
A) the demand curve for bonds shifts to the left.
B) the supply curve of bonds shifts to the right.
C) the equilibrium interest rate falls.
D) the equilibrium price of bonds rises.
B
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Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain
What will be an ideal response?
A system of managed floating exchange rates is
A) a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. B) a system in which governments use flexible exchange rates. C) a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. D) a system in which governments need to reach a prior agreement among them before they may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. E) a system in which governments use extensive fiscal policy to discourage exchange rate movements.
Measuring "y" on the vertical axis and "x" on the horizontal axis, convexity of indifference curves imply that the magnitude of MRS of "y" for "x"
A) is decreasing as "x" increases. B) is increasing as "x" increases. C) is constant as "x" increases. D) cannot be calculated for large levels of "x".
Richard Voith estimated the price elasticity of demand for round-trip rail fare to be 0.62. If fares rose by 30 percent, one would expect the quantity of round-trip tickets purchased to:
A. rise by 18.6 percent. B. fall by 48.4 percent. C. fall by 18.6 percent. D. rise by 48.4 percent.