In the national income accounts, investment includes all of the following EXCEPT:
a. stock market purchases.
b. inventories.
c. purchases of equipment.
d. new home sales.
A
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A one-year bond has an interest rate of 3% and is expected to fall to 2.5% next year and 2% in two years. The term premium for a two-year bond is 0.3% and for a three-year bond is 0.5%
What are the interest rates on a two-year bond and three-year bond according to the liquidity premium theory?
If the economy is experiencing inflation, then the most appropriate government policy would be to:
a. shift the aggregate demand curve by using a tax increase coupled with spending cuts. b. shift the aggregate demand curve by using a tax increase coupled with more spending. c. shift the aggregate demand curve by using a tax cut coupled with spending cuts. d. shift the aggregate demand curve by using a tax cut coupled with more spending. e. shift the aggregate supply curve by using a tax cut coupled with spending cuts.
If a prospective employee is not offered his/her reservation utility or reservation wage, then he/she will
A. tend to look for another job or withdraw from the labor market. B. seek a larger fringe benefit package. C. accept the job because a wage below the reservation utility is very attractive. D. use the job as the basis for a career, assuming that wages will increase beyond the marginal revenue product over time.
The firm's long-run supply curve begins at an output of
A. 100.
B. 150.
C. 215.
D. 300.