When the economy slips into a recession, normally the demand for bonds ________, the supply of bonds ________, and the interest rate ________, everything else held constant
A) increases; increases; rises
B) decreases; decreases; falls
C) increases; decreases; falls
D) decreases; increases; rises
B
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What would the Herfindahl-Hirschman Index equal for an industry consisting of 20 firms with each holding a 5% market share?
a. 20 b. 100 c. 500 d. 2,500
If the Fed unexpectedly decreases the money supply, real GDP
a. increases because the resulting increase in the interest rate leads to a decrease in investment. b. increases because the resulting decrease in the interest rate leads to an increase in investment. c. decreases because the resulting increase in the interest rate leads to a decrease in investment. d. decreases because the resulting increase in the interest rate leads to an increase in investment. e. decreases because the resulting decrease in the interest rate leads to an increase in investment.
If a profit-maximizing monopolist is currently charging a price on the inelastic portion of its demand curve, it should ______.
a. raise price and decrease output b. lower price and increase output c. reduce both output and price d. hold output constant and raise price e. do none of these
Which is true of normal profits?
A. They are necessary to keep a firm in the industry in the long run. B. They are excluded from a firm's costs of production. C. They are greater than the opportunity cost to the firm. D. They are zero under pure competition in the long run.