Stable money and prices are a key source of economic growth because
a. they allow activist policymakers to fine tune the economy.
b. uncertainty and instability in prices will attract investors and business decision makers.
c. price instability increases capital formation.
d. price stability reduces the risks that accompany investment and other long-term commitments.
D
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How is the price of a financial asset, such as government bonds, related to the interest rate?
What will be an ideal response?
A firm is said to be a price taker if it:
A) can affect the market price of goods by changing its supply. B) sells as much of any good as it wants at the prevailing market price. C) consults the government before fixing the price of its goods and services. D) is not free to enter a new market or exit from an existing market.