Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat. Which of the following will occur as a result of these simultaneous events?
A) Both the market clearing price and equilibrium quantity will rise.
B) The market clearing price will fall, but the equilibrium quantity will rise.
C) The market clearing price may rise, fall, or stay the same, but the equilibrium quantity will rise.
D) The market clearing price will fall, but the equilibrium quantity may rise, fall, or stay the same.
C
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Some economists argue that the short-run Phillips curve is not vertical, and that monetary policy can be effective in the short run. Which one of the following is not one of the reasons for this skepticism?
A) Individuals may not be able to use information of Fed Policy to make a reliable forecast of inflation. B) Empirical evidence shows workers and firms have rational expectations. C) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes. D) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical.
Underwriting spreads on equity issues are much __________ than on debt issues because stock prices are so __________ relative to bond prices
A) smaller; steady B) smaller; volatile C) larger; steady D) larger; volatile
If the world price of a good is equal to its no-trade equilibrium price, the country will import more of the good from other nations
a. True b. False Indicate whether the statement is true or false
The long-run demand curve for a monopolistically competitive firm is horizontal.
Answer the following statement true (T) or false (F)