Suppose that the equilibrium nominal interest rate is 5 percent and the equilibrium quantity of money is $1 trillion. At any interest rate below 5 percent,
A) the supply of money will decrease.
B) there will be a surplus of money and bond prices will increase.
C) the interest rate will fall and bond prices will fall.
D) there will be a surplus of money and bond prices will fall.
E) the interest rate will rise and bond prices will fall.
E
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An individual firm desiring to obey the letter of the law while avoiding the effects of regulation may use
a. predatory pricing. b. tit-for-tat strategies. c. creative response. d. collusion.
If the federal government implements programs so that the unemployed are more quickly matched with jobs, then
A) the natural rate of unemployment will decrease. B) the natural rate of unemployment could either increase or decrease. C) the natural rate of unemployment will not change. D) the natural rate of unemployment will increase.
An individual's demand for education is most affected by
(a) direct and indirect costs of schooling. (b) development priorities of the country. (c) the desire to escape agricultural work. (d) all of the above.
Often, the farther real GDP is below potential GDP,
A) the smaller the multiplier effect. B) the larger the multiplier effect. C) the less effective is the multiplier effect. D) the less meaningful is the multiplier effect.