The treasury bill rate is the interest rate paid
A. on government securities that mature in less than a year.
B. on government securities that mature in 30 years.
C. on government securities that mature in 5 years.
D. on government securities that mature in 10 years.
Answer: A
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In constructing the short-run aggregate supply curve, we define the short run as the period in which: a. the price level is constant
b. output is fixed. c. profit is constant. d. the costs of some resources are fixed. e. the economic growth rate is less than 4 percent.
Malaysia, Brazil, and South Korea are each
A. less developed countries (LDCs). B. newly industrializing countries (NICs). C. industrialized countries.
Which of the following describes a surplus-enhancing transaction?
A. Your state government imposes a higher minimum wage than the one set by federal law. B. A person pays $10.00 to buy a scoop of ice cream at a baseball game. C. The Federal government taxes the wealthy to pay for programs to help the poor. D. A firm lays off 25 workers in order to cut costs.
The Swiss franc has a floating exchange rate with the U.S. dollar. Today, the interest rate on one-year Swiss bonds denominated in Swiss francs is 6 percent, and the interest rate on one-year U.S. bonds denominated in U.S. dollars is 6 percent. If uncovered interest parity holds between Swiss francs and U.S. dollars, what is the spot exchange rate that investors are expecting in one year? Now, the U.S. money supply unexpectedly increases by 10 percent. What is likely to be the effect on the spot exchange rate? In your answer assume that the asset market clears faster than the goods market (i.e. prices adjust slowly and interest rates adjust quickly). Also, in your answer address short-run changes in the exchange rate as well as long-run changes.
What will be an ideal response?