Under the liquidity premium theory, if investors expect short-term interest rates to remain constant, the yield curve should:
A. be flat.
B. have a negative slope.
C. have a positive slope.
D. have an increasing slope.
Answer: C
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The number of buyers of sport utility vehicles, SUV, decreases sharply. So the
A) demand curve for SUVs shifts leftward. B) demand curve for SUVs shifts rightward. C) demand curve for SUVs does not shift, nor is there a movement along then demand curve. D) demand curve for SUVs does not shift, but there is a movement downward along it. E) supply curve for SUVs shifts rightward.
To two hunters, a deer running in a forest is
A) nonrival and nonexcludable. B) nonrival and excludable. C) rival and nonexcludable. D) rival and excludable.
A binding price ceiling that could be set in the market in the graph shown would be:
A. $15.
B. $11.
C. $8.
D. $30.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.