When the Fed sells government bonds in the open market, interest rates will rise.
a. true
b. false
Ans: a. true
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Suppose you hold $50 to buy groceries weekly and then the price of groceries increases by 5 percent. To be able to buy the same amount of groceries, what must happen to your nominal money holdings?
A) They must increase by $5. B) They can decrease by $5. C) They must increase by $2.50. D) They must increase, but the amount of the increase depends on income.
"Environmental Awareness" Training Mega Manufacturing's corporate headquarters requires periodic classes in the green policies that it embraces. The Human Resource Department conducts the relevant classes and is run as a profit center with each plant
manager paying a transfer price per employee taking the classes. Recently, some of the plant managers have been hiring outside firms to conduct these classes. HR has complained to corporate that they will have to lay off staff if this continues but the plant managers reply that the outside firms are much cheaper. Why might corporate headquarters want to ban classes run by external firms anyway?
A country has an absolute advantage in the production of a good if that country
a. can produce the good using fewer resources than another country would require b. has the lowest opportunity cost of producing the good and can produce it with the fewest resources c. has the lowest opportunity cost of producing the good regardless of whether it is produced with the fewest resources d. has the greatest opportunity cost of producing the good regardless of whether it is produced with the fewest resources e. has the greatest opportunity cost of producing the good and produces it with the fewest resources
Even though international trade is more complicated, supply and demand are still at the center of the price determination mechanism.
Answer the following statement true (T) or false (F)