If an economy is experiencing deflation, a decrease in the price level, then the most advantageous actions would be
a. borrowing money at a fixed interest rate and buying a house.
b. borrowing money at a fixed interest rate and buying land.
c. keeping money in a checking account.
d. keeping your wealth in gold and other precious metals.
c
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Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?
A) Unemployment is inevitable. B) Resources are not equally useful in all activities. C) Technology is slow to change. D) Labor is scarcer than capital.
Iran called on OPEC in November 2008 to cut production by a further 1 million to 1.5 million barrels per day when it meets in Cairo later this month. Why would OPEC, a cartel, restrict production?
A) to decrease demand B) to increase supply C) to decrease quantity supplied D) to increase profits
The LM curve shows a series of income-interest rate combinations at which there is equilibrium in the
A) bond market. B) goods market. C) saving-investment market. D) money market.
The major assets and liabilities of a bank are:
a. checkable deposits and total reserves, respectively. b. checkable deposits and gold, respectively. c. total reserves and checkable deposits, respectively. d. total reserves and excess reserves, respectively. e. checkable deposits and excess reserves, respectively.