Countries with more independent central banks tend to have
A) higher inflation rates.
B) lower inflation rates.
C) lower rates of unemployment.
D) higher rates of GDP growth.
Answer: B) lower inflation rates.
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A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will
a. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. b. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium. c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. d. not rise in the short run because firms will enter to maintain the price.
Consider the effect of business cycles on bondholders versus stockholders. We expect that business cycles will affect:
A. stockholders more since they are residual claimants. B. bondholders more since the amount they receive depends on profits. C. bondholders and stockholders about the same. D. bondholders more since they do not have any claim to property.
As a result of "Check 21-The Check Clearing for the 21st Century Act":
A. banks no longer have to ship paper checks to complete the process of check clearing. B. the Federal Reserve is no longer involved in the check-clearing process. C. people can write checks and plan on having a couple of days to make a deposit to cover the check amount. D. canceled checks can no longer be used as proof of payment.
China has a trade deficit in services, while India has a trade surplus in services
Indicate whether the statement is true or false