Resources employed to persuade government to redistribute income and wealth to special interests are unproductive
a. True
b. False
A
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Term premium refers to
A) the average difference over a long period of the interest rate on long-term bonds and the interest rate on the short-term federal funds rate. B) the average difference over a long period of the interest rate on short-term financial instruments and the interest rate on the discount rate. C) the difference between the corporate bond rate and the risk-free rate of Treasury bonds. D) the difference between prime rate and the discount rate.
The presence of large sunk costs often serves as a naturally imposed barrier to entry
a. True b. False Indicate whether the statement is true or false
After OPEC raised the price of crude oil in the 1970's, which of the following was the most important reason that there were shortages of gasoline? a. Americans drove large, gas-guzzling vehicles
b. The increase in the price of crude oil by OPEC. c. The effects of a price ceiling on gasoline prices imposed by the US government. d. Increased commuting times resulting from traffic congestion.
Consider a two-country, two-commodity model. Each country has an increasing-cost production-possibility curve. In this model the amounts of the goods that are produced in a country in the no-trade situation are determined by:
A. the factor endowments in the economy. B. total income in the economy. C. the relative prices of the goods. D. technology differences between the industries.