What happened to the risk premium on Baa corporate bonds during the Financial Crisis of 2007-2009?
A) it declined slightly
B) it rose to about 2%
C) it rose to about 4%
D) it rose to about 6%
D
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Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP. How can we measure potential GDP?
What will be an ideal response?
If the price of inputs rises and personal income taxes rise:
a. Aggregate demand falls and aggregate supply rises. b. Aggregate demand rises and aggregate supply rises. c. Aggregate demand falls and aggregate supply falls. d. Neither the aggregate demand nor the aggregate supply change. e. None of the above.
In order to conclude that markets are efficient, we assume that they are perfectly competitive
a. True b. False Indicate whether the statement is true or false
Nonexcludable goods tend to be undersupplied because:
A. people do not pay the true value of the good. B. the free rider problem persists. C. people rarely willingly pay for something they could get for free, regardless of how much they value it. D. All of these statements are true.