The purchase of government bonds by the Fed leads to a(n)
A) increase in the demand of bonds and a decrease in the price of bonds.
B) increase in the supply of bonds and a decrease in bond prices.
C) decrease in the demand of bonds and an increase in the price of bonds.
D) decrease in the supply of bonds and an increase in bond prices.
D
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The model of perfect competition is valuable for
A) prediction. B) comparison to other markets. C) Either A or B. D) None of the above.
If consumers switch away from eating margarine at the same time that the number of margarine suppliers increases, then:
a. these two effects cancel each other out and there is no change in the margarine market equilibrium. b. the demand curve shifts left and the supply curve shifts right. c. there is a margarine price increase. d. there is an excess demand for margarine. e. the equilibrium quantity of margarine must increase.