The interest rate falls if
a. the price level falls or the money supply falls.
b. the price level falls or the money supply rises.
c. the price level rises or the money supply falls.
d. the price level rises or the money supply rises.
b
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A rational investor will always purchase the bond that pays the highest real interest rate
a. True b. False Indicate whether the statement is true or false
The central bank is said to monetize the deficit when it purchases bonds issued by the government.
Answer the following statement true (T) or false (F)
Which of the following statements is not true?
A. Trade is beneficial because it allows all domestic industries to increase production. B. Trade is beneficial because it allows consumption beyond the production possibility frontier. C. Trade is beneficial because it allows more efficient production. D. Trade is beneficial because it allows consumers to buy goods at cheaper prices.
If the price of inputs falls and the level of consumer indebtedness rises:
a. Price index falls, and the change in real GDP is uncertain. b. The change in price index is uncertain, and real GDP rises. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and real GDP falls.