When the Fed decreases the money supply, what will happen to nominal interest rates?
What will be an ideal response?
They will rise.
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In the context of the evaluation of the efficient markets hypothesis, pricing anomalies refer to
A) the existence of trading strategies that appear to have offered above-normal returns. B) the gap between actual and expected prices. C) the spread between the price at which a broker will purchase stock from an investor and the price at which the broker will sell stock to an investor. D) the difficulty in practice of computing stock prices on the basis of expectations of future dividends.
Suppose the actions of the producers of a good impose an external cost which results in the actual market price of $18 and market output of 400 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient price would higher than $18 while the efficient output would be less than 400 units. b. The efficient price would be higher than $18 while the efficient output would be greater than 400 units. c. The efficient price would be lower than $18 while the efficient output would be less than 400 units. d. The efficient price would be lower than $18 while the efficient output would be greater than 400 units.
Real GDP and nominal GDP differ because the real GDP:
a. is adjusted for changes in the volume of intermediate transactions. b. includes the economic effects of international trade. c. has been adjusted for changes in the price level. d. excludes depreciation charges.
Democrats argue that labor demand is ________, so ________ jobs will be lost when the minimum wage is raised.
A. elastic; many B. elastic; few C. inelastic; many D. inelastic; few