When the stock market is rising rapidly, what tends to happen to bond prices and interest rates on bonds?
a) Bond prices rise and interest rates on bonds fall.
b) Bond prices rise and interest rates on bonds rise as well.
c) Bond prices fall and interest rates on bonds fall as well.
d) Bond prices fall and interest rates on bonds rise.
Ans: d) Bond prices fall and interest rates on bonds rise.
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If the price of muffins, a normal good you enjoy, rises, then
A) both the income and substitution effects lead you to buy fewer muffins. B) the substitution effect which causes you to decrease your muffin consumption outweighs the income effect which causes you to increase your muffin consumption, resulting in fewer muffins purchased. C) the income effect which causes you to decrease your muffin consumption outweighs the substitution effect which causes you to increase your muffin consumption, resulting in fewer muffins purchased. D) the income and substitution effects offset each other but the price effect leads you to buy fewer muffins.
The market demand curve for a public good
a. is the horizontal sum of all individual demand curves b. is the vertical sum of all individual demand curves. c. is upward sloping d. is horizontal e. does not exist
The aggregate demand curve slopes downward for the same reason that a microeconomic demand curve slopes downward
a. True b. False
The long-run equilibrium for a perfectly competitive firm occurs at the minimum point of the ________
A) total fixed cost curve B) average fixed cost curve C) average total cost curve D) marginal cost curve