The demand curve for bonds would be shifted to the left by an
A) increase in wealth.
B) increase in expected returns on bonds.
C) increase in expected inflation.
D) increase in the liquidity of bonds relative to other assets.
C
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If we look at real and nominal interest rates in the United States since 1971, we see that
A) the real interest rate has almost always been less than the nominal interest rate because of inflation. B) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it. C) the difference between the nominal and real interest rates has widened during the 1990s because of inflation. D) the nominal interest rate has always been less than the real interest rate because of inflation. E) both the nominal and real interest rates were negative in the highly inflationary 1970s.
The law of one price holds exactly only if
A) buyers have complete information. B) antitrust laws are being enforced. C) it is impossible for buyers to resell the good. D) transactions costs are zero.
If the general education level within a country rises significantly over time, it is likely that:
a. the country will move to a different point along its current production possibilities curve. b. the country's production possibilities curve will not change in any way. c. the country's production possibilities curve will shift in. d. the country's production possibilities curve will shift out. e. the country's production possibilities curve will become convex to the origin.
The kinked demand curve is an explanation of sticky prices
a. True b. False Indicate whether the statement is true or false