Suppose the economy experiences a recessionary gap. Expansionary monetary policy will
A) increase interest rates and increase the bond prices.
B) increase interest rates and decrease the bond prices
C) decrease interest rates and increase the bond prices
D) decrease interest rates and decrease the bond prices
Ans: C) decrease interest rates and increase the bond prices
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The figure above shows the market for milk. The ________ price that producers must be offered to get them to produce 100 gallons of milk per day is ________
A) maximum; $2.50 B) minimum; $3.00 C) maximum; $4.00 D) minimum; $2.50
Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The market equilibrium quantity is
a. 400 b. 450 c. 500 d. 550
Use the above figure. The profit-maximizing output and price is
A. 600 and $16, respectively. B. 600 and $10, respectively. C. 800 and $10, respectively. D. 600 and $8, respectively.
As it relates to the political process, the principal-agent problem results from the:
A) negative externalities that are created by some policy actions. B) political rules that encourage elected officials to engage in unethical and illegal behaviour. C) paradox of voting. D)inconsistency between voters' interest in programs and politicians' interest in reelection. A