In actual practice, short-term interest rates and long-term interest rates usually move together; this is the major shortcoming of the
A) segmented markets theory.
B) expectations theory.
C) liquidity premium theory.
D) separable markets theory.
A
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Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase. B) The price would increase, the demand would decrease, and the supply would increase. C) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. D) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase.
If the economy is in recession and the number of used baby clothing stores increases, then:
a. used baby clothes are a necessity. b. used baby clothes are an inferior good. c. used baby clothes are a normal good. d. new baby clothes are a luxury. e. used baby clothes have price-elastic demand.