The expectations hypothesis assumes:
A. a high level of uncertainty regarding the future of long-term yields.
B. securities of different maturities are not perfect substitutes for each other.
C. investors know the yields on bonds today and form expectations of the yields on short-term bonds in future time periods.
D. the risk premium increases with longer maturities.
Answer: C
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A firm has explicit costs of $110,000 and total revenue of $120,000. Which of the following is true about the firm?
A) The firm might be making an economic profit but we need more information about implicit costs to know for sure. B) The firm is definitely making an economic profit because it must be minimizing its opportunity cost. C) The firm is incurring an economic loss if implicit costs are $10,000. D) The firm is making a normal profit if implicit costs are $0. E) The firm may be making an economic profit but only if implicit costs are negative.
The aggregate supply curve
a. indicates the markup at which firms are willing to supply a given level of output b. is derived from equilibrium conditions in the money market c. has a positive slope because an increase in real GDP causes an increase in the cost of resources d. is found by summing up the supply curves of all the firms in an economy e. illustrates how a change in the price level affects total output
The manufacturer of Beanie Baby dolls used quarterly price data for 2005 I - 2013 IV (t = 1, ..., 36) and the regression equationPt = a + bt + c1D1t + c2D2t + c3D3tto forecast doll prices in the year 2014. Pt is the quarterly price of dolls, and D1t, D2t, and D3t are dummy variables for quarters I, II, and III, respectively.
What is the estimated intercept of the trend line in the 4th quarter?
A. 18 B. 22.8 C. 20 D. 16 E. none of the above
Refer to the information provided in Figure 1.7 below to answer the question(s) that follow.
Figure 1.7Refer to Figure 1.7. At Point A the slope of the line is 0.67, so at Point C the slope would be
A. greater than 0.67. B. equal to 0.67. C. less than 0.67. D. indeterminate from this information.