A nation's country-risk premium increases if:
a. Central bank policies become more predictable.
b. Large corporations, on average, increase their debt-to-equity ratios, thereby making their operations more volatile.
c. Expected inflation becomes harder to predict.
d. The average maturity structure in the nation rises.
e. Its government becomes more stable.
.C
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The following are common errors students make when discussing supply and demand. What is the mistake in each? a. At equilibrium, demand equals supply. b. The quantity of demand is greater than the quantity of supply. c. They move along the line from both ends to an equilibrium in the middle. d. The increase in demand causes an increase in supply.
What will be an ideal response?
If a bank has $10 million of checkable deposits, a required reserve ratio of 10 percent, and it holds $2 million in reserves, then it will not have enough reserves to support a deposit outflow of
A) $1.2 million. B) $1.1 million. C) $1 million. D) $900,000.
If a decrease in the price of good A causes an increase in the demand for good B, then A and B must be complements
a. True b. False
If a reduction in taxes on savings reduced the amount of private saving, then the
a. income effect equaled the substitution effect. b. income effect outweighed the substitution effect. c. the substitution effect outweighed the income effect. d. None of the above.