A rise in short-term interest rates that is believed to be only temporary
A) is likely to have a significant effect on long-term interest rates.
B) will have a bigger impact on long-term interest rates than if the rise in short-term rates had been permanent.
C) is likely to have only a small impact on long-term interest rates.
D) cannot possibly affect long-term interest rates.
C
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Consider the two graphs above. Suppose producers forecast a decrease in sales. This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
How does the price range affect the elasticity of demand for a product?
(A) Price range has little or no effect on elasticity of demand for a good. (B) Demand for a good can be elastic at a low price but inelastic at a high price. (C) Demand for all goods is elastic if the price is low enough. (D) Demand for a good can be inelastic at a low price, but elastic at a high price.
If the money supply is $20 trillion and velocity is 2, then nominal GDP is
A) $2 trillion. B) $10 trillion. C) $20 trillion. D) $40 trillion.
Suppose that there are only two fishermen, Zach and Jacob, who fish along a certain coast. They would each benefit if a lighthouse were built along the coast where they fish. The marginal cost of building each additional lighthouse is $150. The marginal benefit to Zach of each additional lighthouse is 90 - Q, and the marginal benefit to Jacob is 40 - Q, where Q equals the number of lighthouses. What is the efficient number of lighthouses?
What will be an ideal response?