A flight to quality should result in the:
A. yield on corporate bonds falling and the price of U.S. Treasury Securities rising.
B. yield on U.S. Treasury Securities falling and the price of corporate bonds rising.
C. price of U.S. Treasury Securities rising and the price of corporate bonds rising.
D. yield on U.S. Treasury securities falling and the price of corporate bonds falling.
Answer: D
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The operational goals the Fed uses for its monetary policy objectives are
A) the demand for reserves and the supply of reserves. B) the core inflation rate and the output ga
When someone in a country buys an asset abroad, the transaction is recorded
A) in the current account. B) in the official settlements balance. C) in the financial account as a capital inflow. D) in the financial account as a capital outflow.
Davy's Doggie Daycare rents a warehouse and field for $2,000 a month to house its boarding pooches. Farmer Fred owns the property, he used to use it for farming and made $3,000 a month, but has since retired. What is the cost of the warehouse and field to Davy?
A. It is an explicit cost of $2,000. B. It is an implicit cost of $3,000. C. It is an implicit cost of $0. D. There is both an explicit and implicit cost totaling $5,000.
When accounting profits are negative, economic profits could be:
A. positive. B. negative. C. zero. D. All of these are possible.