When the price of a bond is ________ the equilibrium price, there is an excess demand for bonds and price will ________
A) above; rise
B) above; fall
C) below; fall
D) below; rise
D
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________ in the expected future domestic exchange rate causes the demand for domestic assets to shift to the ________ and the domestic currency to appreciate, everything else held constant
A) An increase; right B) An increase; left C) A decrease; right D) A decrease; left
A common theme among examples of market failure is
a. the good being provided harms society in some systematic way. b. some item of value does not have an owner with the legal authority to control it. c. cost-benefit analysis will show that private markets should provide the goods and services. d. government intervention decreases the social benefits.
Suppose that the supply curve remains unchanged. If the demand curve shifts to the right,
A. the market clearing price definitely will increase. B. there will be no change in the market clearing price. C. the market clearing price definitely will decrease. D. the market will collapse.
A newspaper headline asserts: "Falling Demand Pushes Down Housing Prices." This headline
A) incorrectly implies that the demand for housing can change, whereas in fact only the quantity of housing demanded can change. B) incorrectly implies that the price of housing will rise when demand increases. C) incorrectly implies that more housing will be demanded at higher prices. D) correctly implies that a decrease in demand will decrease the market clearing price.