The supply of bonds to the bond market
a. is positively related to the demand for stocks
b. is inversely related to the interest rate
c. is positively related to income
d. is positively related to the demand for bonds
e. only changes if new bonds are issued
E
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Demand-pull inflation occurs
A) when the aggregate supply curve shifts to the right, while aggregate demand remains stable. B) when the aggregate demand curve shifts to the right, while aggregate supply remains stable. C) when the aggregate demand curve shifts to the left, while aggregate supply remains stable. D) when the aggregate supply curve shifts to the left, while aggregate demand remains stable.
Externalities cause the market mechanism to allocate goods and resources inefficiently because
a. nonconsenting third parties are generally not hurt by externalities. b. producers and consumers ignore signals given by the competitive market. c. prices are always higher than they should be. d. competitive markets fail to give producers and consumers correct price signals.
With a tax of zero dollars, equilibrium occurs at
Suppose the supply of labor is W – t = 10H, where W is the gross wage, t is the tax (in dollars), and H is labor hours. The demand for labor is W = 120 – 2H. a) H = 10, W = 100 b) H = 9, W = 90 c) H = 8, W = 80 d) H = 7, W = 70 e) H = 6, W = 60
Explain why a comparison between the interest rates on domestic and foreign bonds might provide misleading information about which bonds yield the highest expected returns
What will be an ideal response?