When the price of a financial asset ________ its interest rate will ________
A) rises; rise
B) falls; fall
C) falls; rise
D) rises; remain the same
Answer: C
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The long-run Phillips curve is a
A) straight line with a 45 degree slope showing the long-run relationship between the inflation rate and the expected inflation rate. B) vertical line that shows the relationship between inflation and unemployment when the economy is at full employment. C) vertical line indicating a positive relationship between inflation and unemployment. D) horizontal line indicating a positive relationship between inflation and unemployment. E) horizontal line that shows the relationship between inflation and unemployment when the economy is at full employment.
Suppose there are three nations (North, South, and East) and three goods (A, B, and C). Given resources and technology, North can produce 5 units of A, or 2 units of B, or 10 units of C, or any linear combination thereof. South can produce 5 units of A, or 2 units of B, or 5 units of C, or any linear combination thereof. East can produce either 1 unit of A, or 5 units of B, or 10 units of C, or any linear combination thereof. The most efficient pattern of specialization is to have
a) North produce A, South produce B, and East produce C b) North produce A, South produce C, and East produce B c) South produce A, North produce B, and East produce C d) South produce A, North produce C, and East produce B e) East produce A, South produce B, and North produce C
In the long run, price elasticities of demand are usually
A. greater than they are in the short run because consumers have time to adjust. B. the same as they are in the short run because tastes don't change. C. less than they are in the short run because prices rise over time. D. less than they are in the short run because real prices fall over time.
The Keynesian point of view suggests that
A. supply creates its own demand. B. demand creates its own supply. C. the market is always at equilibrium. D. full employment is the natural result of market forces. E. wage and price controls can halt deflationary pressures.