Which of the following statements is false? O A. Increased budget deficit of government shifts the supply curve for bonds to the right. O B. An increase in the expected rate of inflation causes the demand curve for bonds to shift to the left. O C. A business cycle expansion will cause a decrease in the price of bonds and a decrease in interest rates. O D. An increase in the expected rate of inflation causes a decrease in the bonds price.

Which of the following statements is false? O A. Increased budget deficit of government shifts the supply curve for bonds to the right. O B. An increase in the expected rate of inflation causes the demand curve for bonds to shift to the left. O C. A business cycle expansion will cause a decrease in the price of bonds and a decrease in interest rates. O D. An increase in the expected rate of inflation causes a decrease in the bonds price.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the short run and the long run and then choose the statement that is correct. O A. The real interest rate is independent of the inflation rate in the long run. B. The real interest rate is dependent on the price level in the long run. C. In the short run, money market equilibrium determines the price level. D. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.
1st attempt Assume that people in the economy have adaptive expectations. If the inflation rate has been stable at 2% in each prior year (because of passive monetary policies) and the central bank wants to lower unemployment, which policy should it implement? Choose one: O A. a policy that makes the inflation rate less than 2% O B. a policy that makes the inflation rate equal to 2% O C. a policy that makes the inflation rate greater than 2%
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Need answer in 30 min with brief explanation.
I advise you to graph this problem. If u=3% and u*=6%, Central bank that uses interest rates should target interest rate. This will result in LY and P. a. None of the answers offered are accurate. O b. increase; lower; higher O c. reduce; lower; lower O d. reduce; higher; higher O e. increase; lower; lower
When Vladimir sells bonds and gets money, his liquidity O A. and interest do not change. B. increases and he gains interest. O C. decreases and he gives up interest. O D. decreases and he gains interest. O E. increases and he gives up interest.
1) Which of the following is false? O A) The COVID-19 pandemic ended the longest economic expansion in US history. O B) 1928 the Federal Reserve raised the discount rate from 3.5% to 5%. O C) The Great Depression took over ten years to recover. D) 2004 - 2006 The Fed dropped the Federal Funds Rate to 0.5%. E) The Emergency Banking Act took the US off the gold standard.
In the long run, the government budget will add to sustained inflation if... O a. Deficits are always accompanied by decreases in the money supply. O b. They require decreases in the money supply. O c. Government borrowing lowers interest rates. O d. The government finances the deficit by borrowing from the private sector. Continual deficits are financed by the continual creation of new money.
Suppose the Bank of Canada lowers its target for the overnight interest rate and longer-term interest rates in the market fall as a result. When this occurs, the commercial banks respond to in the demand for loans by.. O a An increase; selling government securities to the Bank of Canada in exchange for cash, with which they can extend new loans. An increase; borrowing cash from the Bank of Canada with which they can extend new loans. O c. An increase; buying government securities from the Bank of Canada, against which they can extend new loans. O d. A decrease; buying government securities from the Bank of Canada in exchange for cash, and calling in existing loans. O e. A decrease; selling government securities to the Bank of Canada and calling in existing loans.
What do you expect will happen to the price level and real GDP in the short run when the bank of Canada buys domestic government bonds given a positively sloped SRAS curve? Select one: O a. Both the price level and real GDP will cross out increase. O b. Both the price level and real GDP will decrease. cross out O c. The price level will increase while real GDP cross out will decrease. O d. The price level will decrease while real GDP cross out will increase. O e. There is no change either to the price level or cross out the real GDP
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