Which of the following will cause a decrease in market equilibrium price and a decrease in equilibrium quantity?
A. an increase in demand
B. a decrease in supply
C. an increase in supply
D. a decrease in demand
Answer: D
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Assume the interest rate on a current one-year bond is 3%, and the expected interest rate on the one-year bond one year from now is 6%. If the term premium on a two-year bond is 0.5%, then the interest rate on the two-year bond will be
A) 4%. B) 4.5%. C) 5%. D) 6.5%.
The Solow model is ________
A) the basic model of how technology changes over time B) the foundation for the classical economic thought of Adam Smith C) one of the dominant explanations of the business cycle D) based on the notion of diminishing marginal product of capital and labor
The Federal Reserve Banking Act of 1978
a. attempted to guarantee stability of the banking system b. was a reaction to the savings and loan crisis c. added full employment to the list of objectives for the Fed d. strengthened deposit insurance programs e. pledged the Fed to keep the inflation rate low
Suppose that the quantity of cars demanded exceeds the quantity of cars supplied. We would expect that:
A. the price of cars will increase. B. the price of cars will decrease. C. the supply will increase (supply will shift to the right) to meet the demand. D. the demand will decrease (demand will shift to the left) to meet the supply.