If central bankers raise the interest rate, the asset-price channel of monetary policy implies:
A. stock prices will remain the same but bond prices will increase.
B. bond prices will remain flat.
C. stock prices will increase and bond prices will remain flat.
D. stock prices will decrease.
Answer: D
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For movements along the long-run aggregate supply curve
A) potential GDP is dependent on the price level. B) the prices of goods and services change while the prices of productive resources hold steady. C) the price level and the money wage rate change by the same percentage. D) All of the above are correct.
As a consumer you believe yourself to act rationally, optimally and self-interestedly. You like ice cream and value a pint at $7 . Usually you buy a pint each week at $4 . This week however, the price jumped to $5 a pint. What would you do?
a. buy the ice cream since the price is still below your maximum willingness to pay b. buy the ice cream since even at the new price it gives you a positive amount of consumer surplus c. not buy the ice-cream since the price is now higher d. both A&B
Agriculture's share of total output in the U.S. has declined throughout the 20th century, although the absolute value of farm output has increased. The number of U.S. farms grew in the early part of the century, then began to steadily fall. The number of U.S. farms peaked in which of the following decades?
a. 1910–1919 b. 1970–1979 c. 1930–1939 d. 1950–1959 e. 1980–1999
A straight-line downward-sloping demand curve has a price elasticity of demand which:
A. Decreases as price decreases B. Increases as price decreases C. Is zero at all prices D. Is unitary at all prices