A fall in the price of bonds may lead to a(n):
A) decrease in aggregate demand and the price level due to a decrease in net exports.
B) decrease in aggregate demand and an increase in the price level due to a decrease in investment.
C) increase in aggregate demand due to an increase in net exports.
D) increase in aggregate demand due to an increase in investment.
Ans: A) decrease in aggregate demand and the price level due to a decrease in net exports.
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The ability to lower the average costs of production for two or more products is possible with
a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope
If banks move a substantial portion of depositors' money from interest-earning checking accounts into money-market deposit accounts, how will the money supply measures be affected?
a. M1 will become smaller, and M2 will become larger. b. Both M1 and M2 will increase in size. c. Both M1 and M2 will decrease in size. d. The size of M1 will be reduced, but M2 will be unchanged.