Which of the following is a TRUE statement about the relationship between the price of bonds and the interest rate?
A. The prices of bonds increase when the interest rates rise.
B. The prices of bonds are unrelated to the interest rate.
C. The prices of bonds are inversely related to the interest rate.
D. The prices of bonds are directly related to the interest rate.
Answer: C
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If the central bank increases the money supply at the same time as government spending increases, then:
a. interest rates must increase. b. interest rates must decrease. c. income must increase. d. income must decrease.
Goods that are rival in consumption but not excludable would be considered
a. club goods. b. common resources. c. public goods. d. private goods.
If producers must obtain higher prices than before to produce a given level of output, then the following has occurred:
A. A decrease in demand. B. An increase in demand. C. A decrease in supply. D. An increase in supply.
Four firms control the market for a particular good, resulting in an HHI of 2,900. Total industry sales are $500, and it is known that two firms each have sales of $175. If each of the remaining two firms have the same sales, then we can conclude that the remaining two firms each have a market share of:
A. 0.15. B. $75. C. $125. D. 0.50.