Question

11. Businesses can borrow money by which of the following actions? (a) buying goods and services. (b) selling bonds (c) buying bonds (a) selling goods and services. 12. In the market for lettuce to the right, P an fall in the equilibrium price from P2 to P1 and a fall in the equilibrium quantity from Q2 to Q1 would be caused by: P5 T (a) an increase in the supply of lettuce (b) a decrease in the supply of lettuce p2 (c) an increase in the demand for lettuce (d) a decrease in the demand for lettuce.pl De Do 91 92 93 13. The basic assumption that all other things remain the same is known as: (a) habeas corpus (b) alibi. (c) ceteris paribus. (d) e pluribus unum 14. A financial crisis where the prices of stocks, bonds, and real estate fall is most likely to cause individuals to: (a) increase the supply of money. (b) decrease the supply of money (c) increase their demand for money (d) decrease their demand for money Small no i 15. In the market for money to the right, an increase in the demand for money while the supply of money in circulation stays the same will cause: (a) decrease in the quantity of money. (b) decrease in the interest rate. (c) increase in the interest rate. (d) increase in the quantity of money. OL Nonto ) DDD Dm -.Qm qm 16. Bank lending and central bank printing of money is most likely to affect: (a) the demand for money. (b) the supply of mor (c) both the supply and the demand for money. (d) neither the supply nor the demand for money.

Answer 1

Answer to question 11 is option b) selling bonds

This is because , selling bonds in return for borrowings will give businesses funds to continue operation.

Answer to question 12 is option d) a decrease in demand for lettuce

This is because , a decrease in demand for lettuce would shift the demand curve to the left and equilibrium would be attained at the price of P1 and quantity of Q1.

Answer to question 13 is option c) ceteris paribus

Answer to question 14 is option d) decrease their demand for money

This is because , as prices fall , interest rate rises , therefore , with this speculative demand for money decreases and demand for money decreases.

Answer to question 15 is option c) increase in the interest rate

This is because , with supply fixed , as demand for money increases the demand curve shifts upward and with no change in supply , the equilibrium interest rate increases.

Answer to question 16 is option b) supply of money

This is because , printing of money and bank lending are the factors affecting the supply of money in an economy.