Starting from equilibrium in the money market, suppose the money supply increases. Other things being equal, this will cause an excess demand for money, leading people to buy bonds
a. True
b. False
Indicate whether the statement is true or false
True
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The income and substitution effects are part of the reason why
A. the demand curve is downward-sloping. B. the supply curve is upward-sloping. C. the demand curve is upward-sloping. D. the supply curve is downward-sloping.
If, while you are holding a coupon bond, its market price falls, you can be sure that
A) the coupon payment you are receiving must have been reduced. B) the interest rate on other similar bonds must have fallen. C) the interest rate on other similar bonds must have risen. D) the par value of the bond must have declined.
Microeconomics is defined as that part of economic analysis that
A) studies the behavior of the economy as a whole. B) includes the problems of inflation and unemployment. C) studies individual decision making by households and firms. D) concerns aggregate production and consumption.
An appreciation of the dollar against all currencies in the foreign exchange market would result in all of the following, except:
a. a decrease in the dollar prices paid by U.S. importers. b. an increase in the cost of vacations in Florida for Japanese tourists. c. foreign holidays for U.S. residents to be less expensive. d. an increase in the foreign currency prices paid for U.S. exports. e. an increase in the demand for U.S. exports.