Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is $1 trillion. At any interest rate above 4 percent,
A) less than $1 trillion will be demanded and bond prices will fall.
B) more than $1 trillion will be supplied and bond prices will fall.
C) there is a shortage of money and the interest rate will rise.
D) more than $1 trillion will be supplied and the interest rate will rise.
E) less than $1 trillion will be demanded and bond prices will increase.
E
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In the above figure, if no government intervention occurs, at the unregulated competitive market equilibrium, the marginal cost of the externality is ________ per unit
A) $3 B) $4 C) $6 D) $7
Suppose the government spending multiplier is 2. The federal government cuts spending by $40 billion. What is the change in GDP if the price level is not held constant?
A) a decrease of less than $80 billion B) an increase equal to $80 billion C) an increase of greater than $80 billion D) an increase of less than $80 billion E) a decrease of more than $80 billion
A nation’s currency is said to depreciate when exchange rates change so that a unit of its currency can buy fewer units of foreign currency.
Answer the following statement true (T) or false (F)
Which of the following is not correct?
a. When a union is present in a labor market, wages are determined by the equilibrium of supply and demand. b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power. c. The process by which unions and firms agree on the terms of employment is called collective bargaining. d. Most workers in the U.S. economy are not members of a union.