Hogrocket, which developed the Tiny Invaders game for the iPhone, found that to maintain sales in a profitable competitive market, the price of a product
A) will usually rise. B) will usually remain stable.
C) will eventually fall to zero. D) will usually fall.
D
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The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective?
A. Selling government securities and raising the discount rate. B. Buying government securities and raising the discount rate. C. Buying government securities and lowering the reserve requirement. D. Selling government securities and raising the reserve requirement.
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?
a. U.S. Government bonds b. municipal bonds c. common stock d. commercial paper e. none of the above
Most economists reject the theory of rational expectations because
a. expectations adjust very quickly. b. workers receive wage increases in advance of inflation. c. the short-run aggregate supply curve is vertical. d. labor contracts tend to embody past inflation rates.
If a country tries to stimulate the economy with fiscal policy, the effects will be exchange rate
a. depreciation, lower interest rates, and a small increase in aggregate demand. b. depreciation, higher interest rates, and a small decrease in aggregate demand. c. appreciation, lower interest rates, and a small increase in aggregate demand. d. appreciation, higher interest rates, and a small increase in aggregate demand.