If investors begin to perceive that government bonds being sold to finance a deficit have become more risky, the interest rate the country must pay on its bonds will decrease.
Answer the following statement true (T) or false (F)
False
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Suppose a smoker wants to quit smoking. The utility that he gets from smoking a cigarette now is 6 utils but, in the long run, that cigarette will generate undiscounted health problems of 10 utils (e.g., an elevated risk of lung cancer)
Use the concept of discounting to explain why impatient smokers may not quit smoking even though the undiscounted net utility of smoking is negative.
According to the text, "economics tempers the enthusiasm of a manager to focus on the customer" because
A) customers hardly know what they want. B) focusing solely on the customer may ignore other important elements of business success. C) it shows the manager that the greatest benefit to the firm is to sell more. D) it enables the manager to see that any kind of customer focus is not worth the costs. E) it ensures that managers will find equilibrium.
Which of the following best explains why the chained consumer price index generally results in a lower rate of inflation than the regular consumer price index?
a. The chained index is based on a comprehensive bundle of goods and services, while the regular CPI considers only changes in the prices of food and energy. b. The chained index makes allowance each month for shifts away from goods that have become relatively more expensive; the regular CPI does not adjust for this factor. c. The chained consumer price index considers the impact of both rising and falling prices, whereas the regular consumer price index considers only the impact of goods and services with rising prices during the period. d. The chained consumer price index considers only the prices of goods and services purchased by households, whereas the regular CPI also includes the price changes of investment assets such as stocks and real estate.
Other things the same, an increase in the interest rate makes the quantity of loanable funds supplied
a. rise, and investment spending rise. b. rise, and investment spending fall. c. fall, and investment spending rise. d. fall, and investment spending fall.