What is the most important contrast between the segmented markets theory and the expectations theory?
A) The expectation theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes.
B) The segmented markets theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes.
C) The expectations theory does a better job of explaining why yield curves typically are upward-sloping.
D) The segmented markets theory does a better job of explaining why yields on instruments of different maturities tend to move together.
A
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If the labor market worked efficiently, then an effective minimum wage law would:
A. cause unemployment. B. hold wages higher than the equilibrium price. C. help those who were employed at that price. D. All of these statements are true.
AutoCorp is a dealership that has a contract that prevents the main company from opening another dealership within a 30-mile radius. This is an example of:
A. a local monopoly. B. branding. C. a double markup. D. an exclusive territory right.
If the cross-price elasticity of demand is -3, then
a. the goods are substitutes b. one good is price inelastic c. one good is an inferior good d. one good is a luxury good e. the goods are complements
If a bank's total assets are $150 million and total liabilities are $110 million, the bank's net worth is
a. $15 million b. $260 million c. $40 million d. -$40 million e. $5 million