Everything else held constant, if the federal government were to guarantee today that it will pay creditors if a corporation goes bankrupt in the future, the interest rate on corporate bonds will ________ and the interest rate on Treasury securities
will ________. A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
C
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If there is a rise in the price level, there is a(n) ________ movement along the AS curve because there is ________ in the quantity of real GDP supplied
A) upward; a decrease B) downward; an increase C) upward; no change D) upward; an increase E) downward; a decrease
Macroeconomic equilibrium can occur at any point on the 45-degree line
Indicate whether the statement is true or false
Which of the following is subtracted from GNP when calculating net national product?
a. Interest b. Capital consumption allowance c. Rent d. Indirect business taxes e. Income tax
Using the concept of elasticity, show that a drug enforcement policy aimed at getting rid of heroin suppliers may not be very effective in reducing heroin consumption