What should happen to the equilibrium interest rate and the corresponding rate of investment if the Fed decreases the discount rate?
A. The equilibrium interest rate and the equilibrium rate of investment should both decrease.
B. The equilibrium interest rate and the equilibrium rate of investment should both increase.
C. The equilibrium interest rate should decrease, and the equilibrium rate of investment should increase.
D. The equilibrium interest rate should increase, and the equilibrium rate of investment should decrease.
Answer: C
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Refer to the market diagram. Relative to the surplus achieved under perfect competition, how much surplus is lost (deadweight loss) when there is a monopoly?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. E
b. H
c. E + H
d. D + G + E + H
The ________ is defined as the payments to the owner plus the change in a security's value expressed as a fraction of the security's purchase price
A) yield to maturity B) current yield C) rate of return D) yield rate
If the income elasticity of demand for a good is negative, this implies that
a. only the poor will buy the good. b. as incomes fall, less will be spent on the good. c. as incomes rise, the demand for the good will fall. d. the good does not obey the law of demand.
The total value added of the economy equals:
(a) Total profits; (b) Total wages; (c) Total value of all final transactions in the economy; (d) None of the above