Refer to Figure 10.7. A movement from point A to point B could be caused by
A) a negative demand shock.
B) a decrease in the term premium investors expect in the future.
C) an increase in the default-risk premium.
D) an increase in the expected rate of inflation.
C
You might also like to view...
The concept of opportunity cost is illustrated by: a. a movement from the interior of the production possibilities curve to the frontier
b. a movement from the production possibilities curve to its interior. c. a movement from a point on the production possibilities curve to the northeast. d. a movement along the production possibilities curve, as production of one good falls in order to increase production of another.
Suppose Lando Calrissian owns a smuggling business whose total revenue is $30,000 per month. The accompanying table shows Lando's monthly expenses. If Lando weren't a smuggler, he would earn $6,000 per month working for the Rebel Alliance. Apart from pay, Lando is indifferent between working as a smuggler and working for the Rebel Alliance.Fuel$4,000Maintenance$12,000Weapons$6,000Bribes$3,000 In the long run, we would expect Lando to:
A. continue smuggling since his economic profit from smuggling is positive. B. join the Rebel Alliance since his economic profit from smuggling is negative. C. continue smuggling since his accounting profit from smuggling is positive. D. join the Rebel Alliance since his accounting profit from smuggling is negative.
Which of the following might explain why the United States has so much currency per person?
a. U.S. citizens are holding a lot of foreign currency. b. Currency may be a preferable store of wealth for criminals. c. People use credit and debit cards more frequently. d. All of the above help explain the abundance of currency.
Assume the demand function for basketballs is given by QD = 150 ?3P + 0.1I, where P = price of a basketball, and I = average income of consumers. Also, assume the supply of basketballs is given by QS = 2P. If the market for basketballs is perfectly competitive, and the average income is equal to $1,500, what is the equilibrium price and quantity? What if a 20 percent income tax is introduced?
A. Before the tax, the equilibrium price was $60, and 108 basketballs were traded. Once the income tax is introduced, the price would decrease by $6, and only 120 basketballs would be traded. B. Before the tax, the equilibrium price was $60, and 120 basketballs were traded. Once the income tax is introduced, the price would decrease by $6, which would cause the quantity of basketballs traded to increase. C. Before the tax, the equilibrium price was $60, and 120 basketballs were traded. The introduction of an income tax would have no effect on the equilibrium price and quantity. D. Before the tax, the equilibrium price was $60, and 120 basketballs were traded. Once the income tax is introduced, the price would decrease by $6, and only 108 basketballs would be traded.