Which statement about the discount rate is true?
a. A small change in the discount rate has a huge impact on the available money in the economy.
b. The Fed often changes the discount rate several times in a single year.
c. The discount rate impacts the amount of reserves that a bank must have on hand.
d. It is a very important tool because banks rely heavily on being able to borrow from the Fed.
b. The Fed often changes the discount rate several times in a single year.
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A one-year bond has an interest rate of 0.2% and is expected to rise to 0.5% next year and 1.1% in two years. The term premium for a two-year bond is 0.1% and for a three-year bond is 0.25%
What are the interest rates on a two-year bond and three-year bond according to the liquidity premium theory?
The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.Number of EmployeesTotal DonationsAverage DonationsTotal Labor CostsAverage Labor Costs1$30,000 $8,0002$42,426 $17,000 3 $17,321$27,000 4$60,000 $9,5005 $13,416$50,000 The net benefit of hiring fundraisers is largest when ________ employees are hired.
A. 1 B. 2 C. 4 D. 3
The U.S. dollar exchange rate, e, expressed as Japanese yen per U.S. dollar, will depreciate when:
A. real GDP in Japan increases. B. the U.S. Federal Reserve tightens monetary policy. C. real GDP in Japan decreases. D. U.S. consumers decrease their preference for Japanese cars.
If the MRP of land is less than its price, a firm should
A. use more land. B. use less land. C. increase the price it is willing to pay for land. D. try to decrease the productivity of land.