Which combination of signals is indicative that Fed policy is restrictive and that a shift to a more expansionary policy is in order?
a. Commodity prices are falling, and the dollar is appreciating.
b. Commodity prices are rising, and the dollar is appreciating.
c. Commodity prices are rising, and the dollar is depreciating.
d. Commodity prices are falling, and the dollar is depreciating.
A
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As the real wage rate rises, the opportunity cost of
A) working rises. B) saving rises. C) leisure rises. D) buying goods and services rises. E) leisure falls.
According to the segmented markets theory of the term structure
A) bonds of one maturity are close substitutes for bonds of other maturities, therefore, interest rates on bonds of different maturities move together over time. B) the interest rate for each maturity bond is determined by supply and demand for that maturity bond. C) investors' strong preferences for short-term relative to long-term bonds explains why yield curves typically slope downward. D) because of the positive term premium, the yield curve will not be observed to be downward-sloping.
In the 1980s, banks __________ the amount of highly speculative loans they were holding due to __________ deposit rates
A) increased; rising B) increased; falling C) decreasing; rising D) decreased; falling
In Figure 16-2 above, if user costs fall, U0 to U1, then area ________ represents the opportunity cost
A) ABE0U0 B) GE1V0V1 C) U0E0GU1 D) E0E1G