When the coupon rate on newly issued bonds ________ relative to older, outstanding bonds, the market price of the older bond ________
A) decreases; rises in the secondary market B) increases; falls in the primary market
C) decreases; falls in the secondary market D) increases; falls in the secondary market
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Refer to Figure 13.2. If Oliver's political views place him at the L4 position and George's political views place him at the C4 position, Cindy's preference for mayor is
A) Oliver Cousins. B) George Glass. C) Cindy is indifferent between the two candidates. D) Cindy definitely does not like either candidate.
For each of the following scenarios, state the short-run effect on the AS curve
a. The price level decreases. b. Lower inflation is expected in the future. c. Worker productivity declines. d. Oil prices increase. e. The size of the labor force decreases.
Opportunity cost is the combined value of all other alternatives that go unchosen
a. True b. False Indicate whether the statement is true or false