When individuals make decisions about how much money and bonds to hold, which of the following variables affects those decisions?
A) the real interest rate only
B) the nominal interest rate only
C) the expected inflation rate only
D) either the real interest rate or the expected inflation rate
E) both the nominal and real interest rates
B
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Provide examples of goods or services whose elasticities of supply are (a) zero, (b) greater than zero but less than infinity, and (c) infinity
What will be an ideal response?
According to the liquidity premium theory, what does a flat yield curve indicate?
A) Short-term interest rates are expected to remain stable. B) Short-term interest rates are expected to rise. C) Short-term interest rates are expected to fall. D) Long-term interest rates are expected to fall.
The federal funds interest rate
a. can be raised or lowered by the Federal Reserve to regulate the volume of loans to banks. b. is administered by the Open Market Committee. c. increases when the fed conducts open market purchases. d. is set by Congress. e. none of the above.
Which of the following people would not be included among the unemployed?
A. A construction worker laid off because of a slowdown in house building. B. A young mother on welfare because her husband has left her and she must stay home to tend her children. C. A recent high school graduate who has quit his first job as a stock clerk in a grocery store in order to look for a better job. D. A recent college graduate who has not yet found a job.