Fiscal policy affects the money market through its effect on
A) income and money supply.
B) income and money demand.
C) money supply and money demand.
D) money supply and income.
Answer: B) income and money demand.
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Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result
A) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease. B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. D) both the equilibrium price and quantity of MP3 players will increase.
Suppose a Treasury bond will mature in 4 years. If the bond pays a coupon of $425 per year and will make a final par value payment of $10,000 at maturity, what is its price if the relevant market interest rate is 4%?
What will be an ideal response?
A(n) _____ is an increase in wealth caused by an appreciation of the value of an asset that an individual or corporation owns
a. inflationary gain b. profit c. capital gain d. accelerated appreciation
Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to the Canadian IS curve as a result of the leftward shift of the U.S. IS curve?
A) It will shift rightward. B) It will shift leftward. C) It will not change. D) The IS curve will show an increase.