If bagels and doughnuts are substitutes, then a decrease in the price of doughnuts will result in
A. An increase in the demand for doughnuts.
B. A decrease in the demand for bagels.
C. A decrease in the demand for doughnuts.
D. An increase in the demand for bagels.
Answer: B
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U.S. Treasury deposits at the Fed are
A) part of M1, M2, and M3. B) part of M1 and M2. C) part of M1. D) not part of the money supply.
Scott's Painting Company paints houses. Since Scott's business does not have the name recognition of some of the bigger painting companies, Scott advertises a "Five-Year Money Back Guarantee" to indicate to buyers that his service is of high quality. This guarantee is an example of
a. screening. b. signaling. c. the seller's curse. d. the principal-agent problem.
If productivity increases by 3 percent but wages increase by 4 percent, then it is most likely that the price level will:
A. fall by 1 percent. B. fall by 7 percent. C. rise by 1 percent. D. rise by 7 percent.
Collateral is used in all of the following credit arrangements, except
A) repurchase agreements. B) automobile loans. C) credit card lending. D) mortgage lending.