An open market sale of bonds by the central bank will cause which of the following when a liquidity trap situation exists?
A) The interest rate will increase.
B) The interest rate will not change.
C) Output will decrease.
D) The money supply, M, will not change.
E) none of the above
E
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Demand is said to be ____ when the quantity demanded is very responsive to changes in price
a. independent b. inelastic c. unit elastic d. elastic
The fourth step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
If production is characterized by increasing returns to scale, then
a) the economy is self-sufficient and will not engage in foreign trade b) intra-industry trade is likely to occur c) the nation is more likely to be a net importer than a net exporter d) the production possibilities set is limitless e) smaller production runs are more economical than large ones
A firm announces that in order to purchase a Blu-ray player, its customers must also purchase 10 Blu-ray discs. This is an example of:
A. a tie-in sale. B. monopoly pricing. C. price discrimination. D. predatory pricing.