The market price of existing bonds is ________ to the rate of interest prevailing in the economy.
A. totally unrelated
B. inversely related
C. directly related
D. synonymous
Answer: B
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Price fixing tends to result in ________ prices and ________ society's wealth
A) higher; increases B) higher; reduces C) lower; increases D) lower; reduces
If the marginal product of labor is equal to 5 and the marginal product of capital is 2, what is the marginal technical rate of substitution?
What will be an ideal response?
An increase in U.S. federal government budget deficits that raises U.S. interest rates relative to the rest of the world should
A) raise the trade balance. B) decrease foreign portfolio investment. C) cause the dollar to depreciate. D) increase net exports. E) lead to a current account deficit.
Imagine an economy where the only good produced is corn. Output in 1990 was 100 bushels and the price of corn was $2 per bushel. Suppose in 2000 . output is 100 bushels and the price of corn is $4 per bushel. Which one of the following is true?
a. GDP remains unchanged between 1990 and 2000. b. Real GDP doubled between 1990 and 2000. c. Output doubled between 1990 and 2000 . but GDP remains unchanged. d. Nominal GDP fell in 2000 (compared to 1990) because of higher corn prices. e. Nominal GDP increases from $200 in 1990 to $400 in 2000.