Suppose that a curve has a slope equal to zero at some point A. To the right of A, the curve may
A. have a positive slope.
B. have a negative slope.
C. be a straight line.
D. All of these responses are correct.
Answer: D
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
A reduced risk premium __________ the discount factor in the stock price valuation formula, and __________ stock prices
A) raises; raises B) raises; lowers C) lowers; raises D) lowers; lowers
Based on the Saving-Investment Diagram, if the world real interest rate is indicated by C, then ________
A) the difference between values H and D measures the net capital outflow B) the difference between values H and D measures the trade deficit C) the domestic real interest rate is indicated by B D) the difference between values H and F measures the trade deficit E) none of the above
Many rural bank failures in the 1980s can be attributed to
a. the high farm prices of the 1970s that continued to rise in the 1980s and 1990s b. farmers' reluctance to buy more machinery and expand production due to the high farm prices of the 1970s c. the collapse of farm prices and land values in the early 1980s d. numerous loans made to oil-export economies such as Mexico and Venezuela e. the lack of rural loan portfolios being involved in farm ventures