When an economy experiences deflation, investment will:
A. decrease, because businesses will not take out loans that will increase in value over time.
B. increase, because businesses will take out loans that will increase in value.
C. decrease, because businesses will spend cash instead of borrowing it.
D. increase, because businesses will spend cash instead of borrowing it.
A. decrease, because businesses will not take out loans that will increase in value over time.
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We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will increase when
A) supply increases and demand decreases. B) supply and demand for a product simultaneously decrease. C) supply and demand for a product simultaneously increase. D) supply decreases and demand increases.
Consider a portfolio with three stocks, each with the same value. The three stocks have expected returns of 15%, 25%, and 50%. The expected return of this portfolio is
a. 25%. b. 30%. c. 50%. d. 90%.
Which of the following statements is correct?
a. All items that are included in M1 are included also in M2. b. All items that are included in M2 are included also in M1. c. Credit cards are included in both M1 and M2. d. Savings deposits are included in both M1 and M2.
Assume, in a competitive market, price is initially below the equilibrium level. We predict that price will:
A. decrease, quantity demanded will decrease, and quantity supplied will increase. B. increase, quantity demanded will increase, and quantity supplied will decrease. C. decrease and quantity demanded and quantity supplied will both decrease. D. increase, quantity demanded will decrease, and quantity supplied will increase.