Imagine a scandal that finds the officers of bond rating agencies have been taking bribes to inflate the rating of specific bonds. This should:
A. decrease the demand for all bonds.
B. have no impact on the bond market since bond markets are highly efficient.
C. decrease the risk spread.
D. increase the demand for U.S. Treasury securities and decrease the demand for corporate bonds.
Answer: D
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Refer to Table 2-11. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland
a. Which country has an absolute advantage in the production of cell phones? b. Which country has an absolute advantage in the production of lumber? c. What is Estonia's opportunity cost of producing one cell phone? d. What is Finland's opportunity cost of producing one cell phone? e. What is Estonia's opportunity cost of producing one board foot of lumber? f. What is Finland's opportunity cost of producing one board foot of lumber? g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce cell phones? h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce lumber?
Which of the following statements is TRUE for the U.S.?
A) The Federal Deposit Insurance Corporation (FDIC) insures bank deposits against losses up to $250,000. B) The Federal Deposit Insurance Corporation (FDIC) insures bank deposits against losses up to $100,000. C) The Federal Deposit Insurance Corporation (FDIC) insures bank deposits against losses up to $10,000. D) The Federal Deposit Insurance Corporation (FDIC) insures bank deposits against natural disaster up to $100,000. E) The Federal Deposit Insurance Corporation (FDIC) insures bank deposits against floods up to $100,000.
Union membership declined during the 1920s due to:
a. failure of a number of strikes. b. increase in real wages left the labor force satisfied. c. firms' use of "yellow-dog" contracts. d. poor union leadership. e. All of the above.
According to the Taylor rule, if there is an expansionary gap of 2 percent of potential output and inflation is 3 percent, what real interest rate will the Fed set?
A. 2 percent B. 2.5 percent C. 1.5 percent D. 3.5 percent