Which of the following will result in the money market when the price level in an economy rises, while the supply of money remains unchanged?
a. The demand for money will decrease
b. The supply of money will increase.
c. The rate of interest will decrease.
d. The total investment spending in the economy will increase.
e. The rate of interest will increase.
c
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If net exports is a negative number, the government sector must ________ if the private sector is in a ________
A) run a surplus; surplus B) equal zero; deficit C) run a deficit; surplus D) The statement errs because the accounts are not related.
In rational expectations theory, the term "optimal forecast" is essentially synonymous with
A) correct forecast. B) the correct guess. C) the actual outcome. D) the best guess.
Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?
a. A daily newspaper tailored to appeal to the majority of readers in an area. b. Nike creating specialized shoes for American Indians' wider feet. c. Pharmaceutical companies spending research and development funds on drugs for common diseases. d. Airlines offering daily direct flights from one large city to another.
An open market purchase by the Fed causes the value of the dollar to:
A. rise, increasing net exports. B. rise, reducing net exports. C. fall, increasing net exports. D. fall, reducing net exports.