Under the liquidity premium theory the shape of the yield curve depends on
A) the relative return of investments in common stocks versus investments in corporate bonds.
B) the size of the federal government's budget deficit.
C) government tax treatment of long-term versus short-term bonds.
D) the expected pattern of future short-term rates and the size of the term premium at each maturity.
D
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Governments sometimes erect barriers to trade other than tariffs and quotas. Which of the following is not an example of this type of trade barrier?
A) a requirement that the U.S. government buy military uniforms only from U.S. manufacturers B) a requirement that imports meet health and safety requirements C) restrictions on imports for national security reasons D) a requirement that the employees of domestic firms that engage in foreign trade pay income taxes
John has $4000 in savings to buy an engagement ring for his girlfriend even though he has no plans to propose in the near future. When his transmission needs to be replaced in his car, John charges the $2000 worth of auto repair. John's decision is an example of:
A. people recognizing that money is fungible. B. everyday expenses being easier to charge than big purchases. C. people making false distinctions about their money. D. over consumerism.
A tax multiplier equal to -4.30 would imply that a $100 tax increase would lead to a:
a. 43 percent decrease in real GDP. b. $430 decline in real GDP. c. $430 increase in real GDP. d. 4.3 percent increase in real GDP. e. 4.3 percent decrease in real GDP.
Consumers are willing to purchase a product up to the point where
A) the marginal benefit of consuming the product is equal to the marginal cost of consuming it. B) the consumer surplus is equal to the producer surplus. C) the marginal benefit of consuming the product equals the area below the supply curve and above the market price. D) the marginal benefit of consuming a product is equal to its price.