If the price of bonds falls, the
a. demand for bonds will rise
b. supply of bonds will fall
c. supply of bonds will rise
d. interest rate will rise
e. interest rate will fall
D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Which factor of production is paid "profit"?
A) entrepreneurship B) human capital C) labor D) land E) capital
Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________
A) rises; increases B) does not change; does not change C) falls; increases D) rises; decreases E) falls; decreases
Suppose the long-run cost function is C = 2q2. What is the cost-output elasticity for this case?
A) 1 B) 2 C) 1/2 D) 4