When you invest in a mutual fund
(A) Your money is invested in a variety of insurance policies.
(B) You are guaranteed a fixed return on your investment.
(C) Your money is invested in a variety of stocks and bonds.
(D) You have easier access to your money than in a savings account.
Answer: your money is invested in a variety of stocks and bonds
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One reason supply curves have an upward slope is because
A) increased supply will require increased technology. B) to have more of the good supplied requires more firms to open. C) people will pay a higher price when less is supplied. D) a higher price brings a greater profit, so firms want to sell more of that good. E) None of the above answers is correct because supply curves have a downward slope.
An advantage of discretionary policy might be that ________
A) it has been shown to be more efficient than rules B) it is more flexible than rules C) it requires a binding plan in advance to deal with economic problems D) all of the above E) none of the above
If the Federal Reserve wished to decrease interest rates using open market operations, it would
A. buy gold. B. buy U.S. government securities. C. buy corporate stocks. D. sell U.S. government securities.
The mainstream view of macro instability is that:
A. changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP. B. changes in investment shift the aggregate demand curve and thus cause changes in real GDP. C. bursts of innovation put the economy on an unsustainable growth path, eventually producing recession. D. changes in technology and resource availability are the two main sources of fluctuations of real GDP.