The Lehman Brothers bankruptcy triggered a financial panic that featured a(n)
A. increase in Treasury interest rates and an increase in most other interest rates.
B. increase in Treasury interest rates and a decrease in most other interest rates.
C. decrease in Treasury interest rates and an increase in most other interest rates.
D. decrease in Treasury interest rates and a decrease in most other interest rates.
Answer: C
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An unsterilized intervention in which the central bank sells foreign assets to purchase domestic currency will result in
A) higher domestic interest rates. B) lower domestic interest rates. C) an increase in the money supply. D) lower domestic interest rates and an increase in the money supply.
Suppose that the market price for pizzas increases. The increase in producer surplus comes from the benefit of the higher prices to
a. only existing sellers who now receive higher prices on the pizzas they were already selling. b. only new sellers who enter the market because of the higher prices. c. both existing sellers who now receive higher prices on the pizzas they were already selling and new sellers who enter the market because of the higher prices. d. Producer surplus does not increase; it decreases.