A price support program:
A. lowers the market price by making purchases of a good, thereby increasing demand.
B. lowers the market price by making purchases of a good, thereby reducing demand.
C. raises the market price by making purchases of a good, thereby increasing demand.
D. raises the market price by making purchases of a good, thereby reducing demand.
C. raises the market price by making purchases of a good, thereby increasing demand.
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Which of the following is NOT true of the term premium?
A) It is zero under the expectations theory. B) It is infinite under the segmented markets theory. C) It increases as a bond's maturity increases. D) It is zero for thirty-year bonds.
Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in manufactured output. What is the effect on the return of land after trade occurs?
a. The return on land increases. b. The return on land decreases. c. The return on land does not change. d. The effect cannot be determined.
When the IMF provides loans to developing countries, it often requires these countries to adopt:
A. a contractionary fiscal policy and an expansionary monetary policy. B. contractionary monetary and fiscal policies. C. expansionary monetary and fiscal policies. D. a contractionary monetary policy and an expansionary fiscal policy.
If an economy is comprised of two goods and the price of one good rises by 5 percent and the price of the second good rises 3 percent, a possible rate of inflation for the economy is 5 percent.
Answer the following statement true (T) or false (F)