If bond prices rise,
A) interest rates rise, which in turn, discourage investment.
B) interest rates fall, which in turn, discourage investment.
C) interest rates rise, which in turn, stimulate investment.
D) interest rates fall, which in turn, stimulate investment.
Ans: D) interest rates fall, which in turn, stimulate investment.
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Transactions costs are
A) zero in financial markets. B) zero in financial intermediaries. C) the costs of direct financial transactions. D) equal to the taxes imposed on financial transactions.
The long-run Phillips curve is consistent with
a. a negative relationship between unemployment and the rate of expected inflation. b. the expected real wage being equal to the actual real wage. c. the actual price level being equal to the expected price level. d. no relationship between inflation and unemployment. e. all of the above except a.
Which of the following statements is true regarding Temporary Assistance to Needy Families (TANF)?
a. States set the level of welfare benefits they will provide to the poor, and the federal government guarantees some support. b. Since TANF began, the number of needy families receiving benefits has almost doubled. c. Federal dollars are fixed for each state, which may use the money for any antipoverty programs as long as there is a work requirement. d. The federal government’s welfare spending rises and falls depending on how each state sets its welfare contributions.
When a policy succeeds in giving buyers and sellers in a market an incentive to take into account the external effects of their actions, the policy is said to
a. equalize private value and private cost. b. equalize private cost and external cost. c. externalize the actions of the buyers and sellers. d. internalize the externality.