As a result of higher expected inflation,
A) the demand and supply curves for loanable funds both shift to the right and the equilibrium interest rate usually rises.
B) the demand and supply curves for loanable funds both shift to the left and the equilibrium interest rate usually falls.
C) the demand curve for loanable funds shifts to the right, the supply curve for loanable funds shifts to the left, and the equilibrium interest rate usually rises.
D) the demand curve for loanable funds shifts to the left, the supply curve for loanable funds shifts to the right, and the equilibrium interest rate usually rises.
C
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Answer the following statements true (T) or false (F)
1. A positive economic statement is always true. 2. Positive economics deals with “what is” as opposed to “what ought to be.” 3. The largest part of U.S. national income takes the form of profits. 4. Consumption is the ultimate end of economic activity.
Demand deposits multiplied by the required reserve ratio equal the amount of reserves
A. the Federal Reserve is required to hold. B. business firms are required to hold. C. a bank is required to hold. D. foreign investors are required to hold.
An oligopolist must be very sensitive to its rivals because
A. there are so many that their actions are unpredictable. B. the government doesn't regulate oligopolists when it comes to colluding on prices and quantities. C. there are so few that their behavior may well have consequences for the firm. D. oligopolists try not to use non-price competition since it seems to be unfair to the consumer.
The doctrine of laissez faire is based on the belief that
A. Government directives are likely to do a better job of allocating resources than markets. B. Markets result in an unfair distribution of income. C. Markets are likely to do a better job of allocating resources than government directives. D. Government failure does not exist.