Deflation causes the demand for bonds to ________, the supply of bonds to ________, and bond prices to ________, everything else held constant
A) increase; increase; increase
B) increase; decrease; increase
C) decrease; increase; increase
D) decrease; decrease; increase
B
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A model that sometimes makes incorrect predictions may be used by economic decision makers
a. under no circumstances b. only if its assumptions are detailed and realistic c. if it is mathematical and computerized d. if it is simple enough for a child to understand e. until a better model is developed
According to Keynesian theory, if equilibrium real GDP is below the full-employment level, then an increase in aggregate demand will result in which of the following changes in equilibrium?
a. Real GDP will rise, but the price level will remain constant. b. Real GDP and the price level will both rise. c. Real GDP will remain unchanged but the price level will rise. d. None of the above.
A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which
a. brand name identity increases the effectiveness of markets. b. brand name identity can be detrimental to the profitability of a firm. c. advertising is ineffective in salvaging perceptions of product quality. d. advertising cannot be used to establish brand loyalty.
In economics, a public good
A. Is provided in an optimal amount by the market. B. Is any good produced by the government. C. Cannot be denied to consumers who have not paid. D. Has social costs of production lower than private costs of production.