One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same. That means that the yield curve is
A) flat.
B) slightly upward sloping.
C) steeply upward sloping.
D) downward sloping.
A
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In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing slower than potential real GDP?
What will be an ideal response?
Suppose a firm operates in the short run at a price above its average total cost of production. In the long run the firm should expect
a. new firms to enter the market. b. the market price to fall. c. its profits to fall. d. All of the above are correct.
Which of the following is correct?
a. Joan takes some of her income and buys mutual fund shares. Joan's purchase will be included in the investment category of GDP. b. If a share of stock in Virtual Pizza Corporation sells for $77, the earnings per share are $5, and the dividend per share is $2, then the P/E ratio is 11. c. In order to use equity finance, a firm must sell about equal values of stocks and bonds. d. None of the above is correct.
In the United States, federal government tax revenues are somewhat less than _____ percent of GDP.
A. 10 B. 20 C. 30 D. 40