According to the expectations hypothesis:
A. when short-term rates are expected to remain constant in the future, the long-term interest rates are higher than current short-term interest rates.
B. expectations of future short-term rates equal estimates of current short-term rates.
C. short-term bonds are perfect substitutes for long-term bonds.
D. when short-term interest rates are expected to rise in the future, the long-term interest rates are equal to current short-term interest rates.
Answer: C
You might also like to view...
Nettie can produce either 8 cupcakes or 4 hamburgers. Becky can produce either 4 cupcakes or 8 hamburgers. Suppose that Nettie and Becky each specialize in the production of the good for which they have a comparative advantage and decide to trade. The terms of trade are 1 cupcake for 1 hamburger. After trade, how many hamburgers will Nettie consume if Becky consumes 4 hamburgers? How many cupcakes will Becky consume if Nettie consumes 4 cupcakes?
A. Nettie consumes 0 hamburgers, Becky consumes 4 cupcakes B. Nettie consumes 4 hamburgers, Becky consumes 0 cupcakes C. Nettie consumes 4 hamburgers, Becky consumes 4 cupcakes D. Nettie consumes 0 hamburgers, Becky consumes 0 cupcakes
Which of the following statements is CORRECT?
A) Taken together, expenditures on national defense and on income security and health programs now account for less than half of all federal government spending. B) Expenditures on national defense now account for more than twice as much federal government spending as expenditures on income security and health programs. C) Since the mid-1940s, expenditures on national defense have increased considerably as a percentage of total federal government spending. D) Since the mid-1940s, expenditures on income security and health programs have increased considerably as a percentage of total federal government spending.
Explain why the price elasticity of demand varies along a demand curve, even if the demand curve is linear
What will be an ideal response?
In the Keynesian model with both a variable price level and money wage, the aggregate supply function will be
a. upward sloping but flatter than for the variable-price/fixed-wage version of the model. b. upward sloping but steeper than for the variable-wage/fixed-price version of the model. c. vertical. d. horizontal.