You observe that when stock prices rise, interest rates soon fall, and therefore conclude that higher stock prices lead to lower interest rates. This would be an example of:
A. The fallacy of composition
B. Tradeoff among economic goals
C. The post hoc fallacy
D. The use of loaded terminology
Answer: C
Economics
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Keynes's model of the demand for money suggests that velocity is
A) constant. B) positively related to interest rates. C) negatively related to interest rates. D) positively related to bond values.
Economics
In general equilibrium
A) supply equals demand for all goods in all periods. B) supply equals demand for most goods in all periods. C) supply equals demand in present value, but not in all periods. D) prices are exogenous.
Economics