Higher nominal interest rates ________ the amount of money demanded and higher real income ________ the amount of money demanded.
A. increase; increases
B. decrease; increases
C. increase; decreases
D. decrease; decreases
Answer: B
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As a firm in monopolistic competition sets the price for its product, the firm faces a tradeoff between
A) supply and demand. B) efficiency and equity. C) internal and external economies of scale. D) price and the quantity it can sell. E) its marginal revenue and its price.
Business cycles are
A) irregular, with some having two recessions and no expansion. B) predictable, with a recession following a trough. C) unpredictable, but always have two phases and two turning points. D) unpredictable, and don't always have two phases and two turning points.
The intent of indexing is to: a. reduce inflation gradually
b. shift the long-run Phillips curve to the right. c. take most of the sting out of inflation. d. raise tax revenue automatically during inflation.
A diversified portfolio is comprised of
A) a broad range of various types of assets. B) government bonds issued by federal, state and local governments. C) corporate stocks of several companies in the same industry. D) a diverse set of corporate bonds.