Bonds cannot have yields below the effective lower bound because:
A. the banking technology does not exist to deal with negative yields.
B. the U.S. treasury guarantees all bonds to have a positive yield.
C. people can always hold cash.
D. all of the answers given are correct.
Answer: C
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Why is the relationship between marginal product and marginal cost an inverse one?
What will be an ideal response?
An increase in interest rates might be an example of a ________ policy for the purpose of ________
A) monetary; reducing inflation B) monetary; lowering unemployment C) monetary; increasing the quantity of money D) fiscal; reducing inflation E) fiscal; lowering unemployment
The value of marginal product curve is downward sloping because:
A. profits decline as more workers are hired. B. firms must lower price to sell more. C. of the law of diminishing returns. D. at lower wages, only less qualified workers are available.
Nonmarket transactions are omitted from GDP because ______.
a. they are covered by other economic measurements. b. people who do them are often illegal aliens c. they fail to make enough of an impact on the economy d. reliable information is lacking for them