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ECON 201 // FALL 2011 // LMJVI n3 tocks and more 6. When interest rates increase, investors purchase fewer shares of corporate s f investors purchase more shares 0 se I a direct) corporate bonds. When interest rates decrease, corporate stocks and fewer corporate bonds. This suggests (an inver (an inverse I a relationship exists between interest rates and stock purchases and suggests direct) relationship exists between interest rates and bond purchases. a. Not enough information has been provided to determine if any relationship exists. b. An inverse; an inverse. c. A direct; an inverse. d. A direct; a direct. e. An inverse; a direct. urrent unemployment rate is greater than monetary policy to be lve the Federal increasing) the 7. Assume the economy is in a situation where the c the natural rate of unemployment. The most comprehensive to correct this situation would invo the Federal Reserve Governmental securities, (decreasing I quired reserve ratio (rr). implemented by Reserve (selling / buying) U.S. discount rate, and (decreasing / increasing) the re '1. \\ I\\ a. Buying; decreasing; decreasing. b. Selling; decreasing; decreasing. c. Selling; increasing; decreasing. d. Selling; increasing; increasing. e. Buying; increasing; increasing. ominal Gross Domestic Product (GDP) gures of 660 million Bidenbux, the monetary unit of Bidenland) and 812 million 120 in Year #1 and 140 in a price index were Year #1 and Year #2 Real Gross Domestic 8. The country of Bidenland had n \"BBux\" in Year #1 (BBux are BBux in Year #2. The appropriate values for Year #2. It can be concluded that between Product (RGDP) in Bidenland: a. Decreased by 30 Million BBux. b. Increased by 42 Million BBux. c. Increased by 50 Million BBux. d. Increased by 30 Million BBux e. Decreased by 50 Million BBux. 9. The government in 02 set the price of gas at ten (10) Ozzies per gallon (an Ozzie is the monetary unit of Oz); that is, it is illegal to buy a gallon of gas at any price other than 10 Ozzies per gallon. Assume we observe long lines of people who want to purchase gas at that price but who are not able to nd any. Which of the following statements accurately describes the market for gasoline in Oz? allon of gas in Oz must be 10 Ozzies per gallon. allon of gas in Oz must be less than 10 Ozzies per gallon. 21. The equilibrium price of a g o conclude anything about the price of a b. The equilibrium price of a g c. Without more information, we are not able t gallon of gas in Oz. f a gallon of gas in Oz must be more than 10 Ozzies per gallon. d. The equilibrium price 0 e. The supply of gasoline in Oz must be represented by a horizontal line at the rate of 10 Ozzics per gallon. 10. Assume the supply curves of both good \"K\" and good \"M\" slope upward and to the right. Assume a price ceiling is installed in the market for good \"K\" at the equilibrium price and a price oor is installed in the market for good \"M\" at the equilibrium price. Now, assume there is an increase in the prices of the resources that produce each of these goods. As a result, the price of good \"K\" will (decrease I not change / increase) and the price of good \"M\" will (decrease / not change I increase). a. Not change; decrease. b. Decrease; increase. c. Increase; not change. d. Decrease; not change. e. Not change; increase