Suppose financial market participants expect short-term rates in the future to be less than current short-term interest rates. Given this information, we would expect
A) an upward sloping yield curve.
B) a downward sloping yield curve.
C) an upward shifting yield curve.
D) a downward shifting yield curve.
E) a horizontal yield curve.
B
You might also like to view...
Consider two countries—A and B. Both the countries are identical except for the fact that institutions are extractive in country A and institutions are inclusive in country B
Given this information, which of the following statements will be true? A) Country A will be characterized by higher output and larger number of entrepreneurs than country B. B) Country A will be characterized by lower output but larger number of entrepreneurs than country B. C) Country A will be characterized by lower output and smaller number of entrepreneurs than country B. D) Country A will be characterized by higher output but lower number of entrepreneurs than country B.
To determine the equilibrium price level and equilibrium level of real GDP, the aggregate demand and aggregate supply must
A) be considered as a multiplier. B) be disregarded. C) be considered separately. D) intersect.
As more labor is hired, moving along the production function, diminishing returns occur because
A) workers are overworked and so their productivity decreases. B) the wage rate paid is too low and so workers decrease their work effort. C) there are fixed quantities of other resources. D) the real wage rate must increase in order to hire additional workers. E) real GDP increases more rapidly the more workers are hired.
If the Fed believes the natural rate of unemployment is 5.5 percent and the natural rate is really 5 percent, what is likely to happen in the short run?
a. The Fed will allow unemployment to be unnecessarily high and output to be unnecessarily low. b. The Fed will allow unemployment to be unnecessarily high, but output will remain at potential. c. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily high. d. The Fed will allow output to be unnecessarily low, but unemployment will remain at the natural rate. e. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily low.