Suppose that interest rates are expected to remain unchanged over the next few years. However, there is a risk premium for longer-term bonds. According to the liquidity premium theory, the yield curve should be:
A. upward sloping and relatively flat.
B. inverted.
C. vertical.
D. upward sloping and very steep.
Answer: A
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Which of the following is likely to happen if there is an increase in entrepreneurial activity in an economy?
A) The productivity of the economy will increase. B) The inflation rate in the economy will decrease. C) The exchange value of its currency in the foreign exchange market will increase. D) The income per capita of the economy will fall.
Holding your income and the price of lobster constant, you can derive your demand curve for steak from an indifference curve/budget line diagram by determining how your consumption of steak changes when the price of a steak changes
Indicate whether the statement is true or false
Increasing returns means that
A) each additional worker produces more than the worker before him/her. B) each additional worker costs less. C) marginal cost rises. D) technology is having a negative impact on production.
Which of the following is true? a. Poverty, defined as the lack of a minimum level of consumption, could be potentially eliminated, but scarcity could not. b. Scarcity could be potentially eliminated but poverty could not
c. Both scarcity and poverty could be potentially eliminated. d. Neither scarcity nor poverty could be potentially eliminated.