If there is an unrest in Europe that threatens the economic stability of Turkey, the
A. supply of the Turkish currency will fall.
B. demand for the Turkish currency will fall.
C. demand for the Turkish currency will rise.
D. supply of the Turkish currency will rise.
Answer: B
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If the Taylor Principle is not followed and nominal interest rates are increased by less than the increase in the inflation rate, then real interest rates will ________ and monetary policy will be too ________
A) rise; tight B) rise; loose C) fall; tight D) fall; loose
In which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9?
a. The tax on airline tickets increases from $20 per ticket to $60 per ticket. b. The tax on airline tickets increases from $20 per ticket to $90 per ticket. c. The tax on airline tickets increases from $15 per ticket to $60 per ticket. d. The tax on airline tickets increases from $15 per ticket to $135 per ticket.
When a government imposes price controls, the result is that
A. all trades are as mutually beneficial to each party as possible. B. the price system operates more efficiently. C. scarcity usually disappears. D. the rationing function of prices is not allowed to function freely.
In most cases, the higher is the quality of the collateral for a loan is
A) the higher is the interest rate. B) the lower is the interest rate. C) the riskier is the loan. D) the greater is the handling charge for the loan.