What will happen to the price and quantity of a Government bond if the Fed takes action to increase the DEMAND for government bonds?
What will be an ideal response?
Answer: increase price, increase quantity
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Bringing oil to the market is a relatively long and costly process. The whole process from exploration to pumping significant amounts of oil can take years. What does this indicate about the price elasticity of supply for oil?
A) The elasticity coefficient is likely to be very high and supply is inelastic. B) The elasticity coefficient is likely to be low and supply is highly inelastic. C) The elasticity coefficient is likely to be low and supply is highly elastic. D) The elasticity coefficient is likely to be close to zero and supply is perfectly elastic.
The Capital Asset Pricing Model
A) is a way to formulate the cost of capital. B) is a way to calculate the weighted cost of capital. C) is a usual model for stock market investing. D) none of these choices
Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that
a. the nation is producing beyond its capacity, so inflation will occur. b. the nation is not using all available resources or is using inferior technology or both. c. the nation is producing an efficient combination of goods. d. there will be a large opportunity cost if the nation tries to increase production of any good.
Why is it impossible for the unemployment rate to be zero?
a. There will never be more jobs than workers in an economy. b. There will always be people who quit or are fired. c. There will always be some form of inflation occurring. d. There will never be more workers than jobs in an economy.