There are different interest rates associated with many types of securities. Which of the following statements is correct?
A) they vary depending on the liquidity of the security
B) they vary depending on the risk associated with the security
C) except in very unusual times, most interest rates move together
D) all of the above
E) none of the above
D
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Companies often find it to be more profitable to use a commission or piece-rate system of compensation rather than a salary system, yet many firms continue to pay their workers salaries
List three reasons why a firm would choose a salary system of compensation.
In the liquidity trap, monetary policy
A) has a large impact on interest rates. B) has a small impact on interest rates. C) has no impact on interest rates. D) has a proportionate impact on interest rates.
A monetarist would advocate increasing the growth rate of money during an inflation.
Answer the following statement true (T) or false (F)
Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market?
A) Both offer DSL internet service; Xenophone earns a profit of $8 million and Gigacom earns a profit of $7 million. B) Xenophone offers internet service via cable line and earns a profit of $4 million while Gigacom offers DSL internet service and earns a profit of $4.5 million. C) Xenophone offers DSL internet service and earns a profit of $5 million while Gigacom offer internet service via cable line and earns a profit of $6.5 million. D) Both offer internet service via cable line; Xenophone earns a profit of $6 million and Gigacom earns a profit of $9 million.