When the central bank decreases the money supply, we expect interest rates a. and stock prices to rise. b. and stock prices to fall. c. to rise and stock prices to fall. d. to fall and stock prices to rise.

/in /by

When the central bank decreases the money supply, we expect
interest rates

a.     and stock prices to rise.

b.    and stock prices to fall.

c.     to rise and stock prices to fall.

d.    to fall and stock prices to rise.

You might also like
A fresh M.Com graduate turns down a job offer of Rs.3,00,000 per year and starts his own business. He will invest Rs. 5,00,000 of his own money, which has been in a bank account earning 7 per cent interest per year. He also plans to use a building he owns in Kolkata that has been rented for Rs.15,000 per month. Revenue in the new business during the first year was Rs.10,70,000 while other expenses were Advertising Rs. 50,000 Rent Rs. 1,00,000 Taxes Rs. 50,000 Employees’ salaries Rs. 4,00,000 Supplies Rs. 50,000 Determine Profit using accounting profit approach and economic profit approach.
With the aid of a diagram, illustrate and explain the firm’s long-run equilibrium position.
Some people might argue that the reason the government has to manage cost and benefit externalities is because of the “Common Pool Problem.” Explain the reasoning of that statement. Do you agree or disagree? Explain why. The price of food has seen a rapid increase in the past several months, especially in the US where demand has leveled off, and in fact may have even begun to drop. With demand subsiding, why does the price continue to go up? Does the price of food fit standard supply and demand model? Use the concepts of supply and demand from the reading assignment to express your responses. You may also use other markets other than the US to make your point.
If a firm faces a perfectly elastic demand curve for its products, then
Justin has the utility function _U _= _xy_, with the marginal utilities _MUx _= _y _and _MUy _= _x_. The price of _x _is $2, the price of _y _is _p__y_, and his income is 40. When he maximizes utility subject to his budget constraint, he purchases 5 units of _y_. (a) What must be the price of _y _and the amount of _x _consumed? (b) Prove that this allocation follows the equi-marginal principle. (c) What would be the new bundles of x, y if Px was $3
a) Airbus makes 50 planes a year, which sell for $50 million each. If Airbus raises its price, Boeing will leave its prices unaltered, so Airbus loses market share. It faces an elastic demand curve. However, if Airbus cuts its price below $50 million, Boeing is forced to match the price cut, so quantity demanded increases only to the extent that additional plane orders are placed when planes are cheaper. Each company faces inelastic demand when it cuts the price. Draw the demand curve that Airbus thinks it faces. (7 marks) b) Suppose the wool industry is perfectly competitive. i) Draw 6 diagrams showing the equilibrium positions of a competitive firm in the short run and in the long-run. (24 marks) ii) Assuming that a single firm is enjoying abnormal profits, draw another diagram to show the effects of the development of artificial fibres that reduces the demand for wool on the firm’s equilibrium position.
In what ways were men and women treated differently in Ancient Greece? Did the treatment of women differ from other ancient societies from this period? Explain.
Consider a consumer who wants to consume only two commodities and has an income of $100. Assume the price of good 1 is $10 per unit and the price of good 2 is $20 per unit. Now, inflation causes the price of good 1 to increase to $20 per unit, while the price of good 2 increases to $25 per unit. On the other hand, the consumer also gets a raise of $100 (so her new income is $200). Is she better off or worse off?