In Keynes's view, an excess quantity of money demanded causes people to:
a. sell bonds and the interest rate rises. b. buy bonds and the interest rate falls.
c. buy bonds and the interest rate rises. d. increase speculative balances.
a
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What will tend to happen to wages if workers and employers foresee inflation?
a. Both parties will seek to reduce nominal wages and therefore keep real wages the same. b. Nominal wages will remain constant but real wages will increase to avoid the effects of inflation. c. Inflation erodes purchasing power of workers, and real wages are unchanged. d. Nominal wages will increase by an amount that keeps real wages constant.
Recent changes in methods used to compute the CPI have made the
a. upward bias in the CPI inflation rate more severe than it used to be. b. upward bias in the CPI inflation rate less severe than it used to be. c. downward bias in the CPI inflation rate more severe than it used to be. d. downward bias in the CPI inflation rate less severe than it used to be.
Saving done for the purpose of leaving an inheritance is called ________ saving.
A. public B. bequest C. life-cycle D. precautionary
Based on the information in the table, which product would be an inferior good?Product% Change in Income% Change in Quantity DemandedA-10-10B+5+5C-3+3D-3-3
A. Products A and D B. Product B C. Product C D. Product D only