Assume the Expectation Hypothesis regarding the term structure of interest rates is correct. Then, if the current one-year interest rate is 4% and the two-year interest rate is 6%, then investors are expecting the future one-year rate to be:
A. 8%.
B. 6%.
C. 5%.
D. 4%.
Answer: A
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Society can produce at a point outside the production possibilities frontier, but only if it is using all of its resources efficiently.
Answer the following statement true (T) or false (F)
Which one of the following countries was the "spark" that ignited the 2009 euro crisis?
A) China B) Greece C) England D) Spain E) Germany
If the government wished to shift aggregate demand to the right, it might:
A. increase government spending. B. increase income taxes. C. pressure the Fed to decrease the money supply. D. Any of these things might cause aggregate demand to shift to the right.
If exports and imports both rose, but exports rose less than imports, a. AD would decrease
b. AD would increase. c. AD would be unaffected. d. AD could either increase or decrease.