If fluctuations in interest rates become smaller, then, other things equal, the demand for stocks ________ and the demand for long-term bonds ________
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases
D
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Competition from substitute goods is more of a threat when switching costs are high
Indicate whether the statement is true or false
Sandy is a big Star Wars fan and buys a $20 ticket a week in advance to the premier of the new movie. After arriving at the theater, she realizes she left the ticket at home and doesn't have time to return home and get it. Sandy can buy another ticket for $20. She decides not to because seeing the movie isn't worth $40 to her. This is an example of:
A. rational behavior because she values the movie less than $40 B. irrational behavior because she really values the movie more than $40 C. irrational behavior because the initial $20 is a sunk cost. D. rational behavior because it is a commitment device to never forget a ticket at home again.
A subsidy in an industry would be likely to increase the consumer surplus for buyers in that industry and increase the producer surplus for sellers in that industry
a. True b. False Indicate whether the statement is true or false
If the Federal Reserve wishes to increase the money supply by $30,000 and the reserve requirement ratio is 0.4, how big a purchase of bonds will the Fed need to make?
a. $75,000 b. $12,000 c. $1,000 d. $30,000 e. $3,000