In the early 2000s, the Fed's ____________ interest rate policy had several effects. Among these effects were a _______________ in mortgage interest rates and a(n) ____________ in the size of loans taken out by mortgage borrowers
A) high; decline; decrease
B) low; decline; increase
C) low; rise; increase
D) high; rise; increase
B
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According to the budget line in the above figure, which of the following combinations is unaffordable?
A) 1 pizza and 3 CDs B) 3 pizzas and 2 CDs C) 2 pizzas and 4 CDs D) All of the above are affordable.
Assume that the LCD and plasma television sets industry is perfectly competitive. Suppose a producer develops a successful innovation that enables it to lower its cost of production. What happens in the short run and in the long run?
A) The firm will probably incur losses temporarily because of the high cost of the innovation, but in the long run it will start earning positive profits. B) The firm will be able to increase its economic profits temporarily, but in the long run its economic profits will be eliminated as other firms copy the innovation. C) Initially, the firm will be able to increase its profit significantly, but in the long run its profits will still be greater than zero but lower than its short-run profits because other firms would also innovate. D) This firm will be able to earn above normal profits indefinitely if it obtains a patent for its innovation.
If the six-month Treasury bill has an interest rate of 0.5%, the ten-year Treasury bond has an interest rate of 1.6%, and a ten-year bond issued by Dell has an interest rate of 4%, what is the risk premium on Dell's bond?
What will be an ideal response?
In the United States, the earnings gap between workers with college degrees and workers with high school degrees
a. has never been documented by reliable evidence. b. is evident, but it has remained roughly constant over the past several years. c. is evident, but it has diminished over the last several years. d. is evident, and it has widened over the last several years.