With a fixed supply of money, as GDP rises, the demand for money ____ and therefore ____ must rise to encourage savers to hold financial assets instead of cash.
A) falls; prices
B) rises; incomes
C) rises; rates of interest
D) falls; taxes
Ans: C) rises; rates of interest
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Which of the following is a macroeconomic issue?
A) how a rise in the price of sugar affects the market for sodas B) how federal government budget deficits affect interest rates C) what determines the amount a firm will produce D) the cause of a decline in the price of peanut butter
A proposition about the relationship between two variables that can be proven false is called:
A) a hypothesis. B) a law. C) a theory. D) the scientific method.
Economists generally believe that bankruptcy laws are
A. counterproductive to a well-ordered society. B. unnecessary but not counterproductive. C. necessary and difficult to abuse. D. necessary to motivate hard work but can be abused.
For foreign direct investment to occur, the purchase has to be more than
A. 5 percent but less than 10 percent of shares in a business located abroad. B. 10 percent of shares in a business located abroad. C. 8 percent but less than 10 percent of shares in a business located abroad. D. 2 percent but less than 5 percent of shares in a business located abroad.