The long run is the period of time during which _____
Fill in the blank(s) with the appropriate word(s).
all resource prices are variable.
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Refer to Table 9-10. Suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the CPI for 2016?
A) 14.3 B) 87.5 C) 114.3 D) 160
Fiat money is backed by: a. gold or silver
b. fractional reserves. c. the promise of a bank to redeem it upon presentation. d. the commodity in which it is denominated. e. nothing.
When the Fed buys bonds and injects additional reserves into the banking system, this action will
a. place downward pressure on short-term interest rates. b. cause many decision makers to expect that the future rate of inflation will fall. c. place upward pressure on both short-term and long-term interest rates. d. place upward pressure on short-term interest rates and downward pressure on long-term interest rates.
Arbitrage occurs when:
A. bond and stock rates of return equalize. B. investors try to profit from selling a lower rate of return asset to buy one that is nearly identical but with a higher rate of return. C. rates of return across all stocks equalize. D. investors move from lower to higher rate of return assets, regardless of the comparability of the assets.