We would expect which of the following to occur when the central bank pursues contractionary monetary policy?
A) an increase in bond prices and an increase in the interest rate (i)
B) a reduction in bond prices and an increase in i
C) an increase in bond prices and a reduction in i
D) a reduction in bond prices and a reduction in i
E) none of the above
B
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Suppose that Dave has $200 to spend per week and he buys only magazines and pizza. The price of a pizza is $10 and the price of a magazine is $5. What is Dave's real income in terms of magazines?
A) 20 B) 40 C) 200 D) 10
Which of the following is true of a demand curve? a. It must remain stable over time
b. It can shift either rightward or leftward. c. It is possible to move along the curve, but the demand curve will not shift. d. None of the above are true.
If the government announces a new increase in spending with no change in taxes, which of the following would most likely occur?
a. No change in the aggregate demand curve as well as no movement along it b. A leftward shift of the aggregate demand curve c. An upward movement along the aggregate demand curve d. A rightward shift of the aggregate demand curve e. A downward movement along the aggregate demand curve
One argument against using a profit-sharing scheme is the potential for free-riding. In this situation, free-riding refers to
A. one firm using the same contract specifications as another firm. B. a worker not providing effort because his contribution to profit is very small. C. profits being insensitive to worker effort because all increases in profit are returned to the workers due to the profit-sharing scheme. D. the firm not honestly reporting its profits. E. a worker not providing effort because he does not want his coworkers' wages to increase.