Refer to the information provided in Figure 3.15 below to answer the question(s) that follow.
Figure 3.15Refer to Figure 3.15. The current price of a bag of pretzels is $1.10. You accurately predict that in this market,
A. price and quantity demanded increase, and quantity supplied decreases.
B. price and quantity supplied decrease, and quantity demanded increases.
C. price, quantity demanded, and quantity supplied decrease.
D. price tends to remain constant, and quantity supplied increases.
Answer: B
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When the Fed sells bonds and drains reserves from the banking system, thereby reducing the supply of money, this policy will
a. decrease short-term interest rates to a greater degree than long-term interest rates. b. decrease long-term interest rates to a greater degree than short-term interest rates. c. increase short-term interest rates to a greater degree than long-term interest rates. d. increase long-term interest rates to a greater degree than short-term interest rates.
The price of gold is volatile because the supply is highly inelastic, so changes in demand have a large effect on price.
Answer the following statement true (T) or false (F)
Free trade allows the people of a country to produce outside their production possibility frontier.
Answer the following statement true (T) or false (F)
The reliability of a study using multiple regression analysis depends on all of the following with the exception of
A) omitted variable bias. B) errors-in-variables. C) presence of homoskedasticity in the error term. D) external validity.