An unexpected rise in the Producer Price Index should send bond prices __________ and stock prices __________
A) up; up
B) up; down
C) down; up
D) down; down
D
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To achieve faster growth, economies can increase income tax rates in order to increase saving rates
Indicate whether the statement is true or false
A monopolistically competitive industry that earns economic profits in the short run will
A) experience a rise in demand in the long run. B) experience the entry of new rival firms into the industry in the long run. C) experience the exit of existing firms out of the industry in the long run. D) continue to earn economic profits in the long run.
The opportunity cost of providing a public good to an additional individual is
A) infinite. B) zero. C) impossible to determine. D) high because of the exclusion principle.
Raising the discount rate is: a. an expansionary policy because it raises the ratio of excess to total reserves in the banking system
b. a contractionary policy on the part of the member banks of the Fed because it raises the firms' costs of borrowing from them. c. a contractionary policy on the part of the Fed because it raises the commercial banks' cost of borrowing from it. d. an expansionary policy on the part of the member banks of the Fed because it raises their profits relative to those of the nonmember banks. e. an expansionary policy on the part of the Fed because increasing the interest rates that the banks are allowed to charge will increase their willingness to make loans.