Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result
A) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.
B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease.
C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase.
D) both the equilibrium price and quantity of MP3 players will increase.
D
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Financial markets pay close attention to changes in the federal funds rate because these changes ________.
A. indicate commercial bank lending policies B. indicate the Fed's plans for monetary policy C. directly affect the interest payments on the national debt D. directly affect a large volume of loans
If the inflation rate is 5 percent and the real interest rate is 2.5 percent, then the nominal interest rate is
A) 10 percent. B) -2.5 percent. C) 2.5 percent. D) 7.5 percent. E) 2 percent.
Measuring the intensity of the business cycle requires
a. adding seasonal variations to cyclical fluctuations. b. adding seasonal variations and random fluctuations to cyclical changes. c. eliminating seasonal variations and identifiable random forces from the data. d. multiplying the trend by the cyclical fluctuations.
The long-run aggregate supply curve shifts right if
a. the price level rises. b. the price level falls. c. the capital stock increases. d. the capital stock decreases.