Why do yield curves usually slope upward?
What will be an ideal response?
The upward sloping yield curve is the most common since it includes the risk premium for longer maturities, and the risk premium increases with maturities. So even if investors expected short term rates to remain constant, we would still observe an upward sloping yield curve.
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Economists use the term capital to describe that factor of production that includes human-made resources such as factories, buildings, machinery, and tools.
Answer the following statement true (T) or false (F)
Public goods arise because of externalities.
Answer the following statement true (T) or false (F)
The sum of the current account, the capital account, and the official reserve transaction account is
A) always positive. B) always negative. C) positive when exports are greater than imports. D) zero.
Suppose an American worker can make 100 chairs or catch 1000 fish per day. On the other hand, a Chilean worker can produce 40 chairs or catch 400 fish per day. The United States possesses a(n) _______________ advantage in chair production, but not a(n) ______________ advantage in fish production.
A. absolute; comparative B. comparative; absolute C. absolute; absolute D. comparative; comparative