Assume the current price investors are willing to pay on a $1,000 face value one-year Treasury bill is $980.39, and investors expect that they will be willing to pay $961.54 on a $1,000 face value one-year Treasury bill one year from now
According to the expectations hypothesis, the current interest rate (per year) on a $1,000 face value two-year Treasury bill should be A) 3%.
B) 4%.
C) 5%.
D) 6%.
A
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The cyclical deficit is the portion of the deficit
A) that would exist if the economy were at full employment. B) that does not add to the national debt. C) that is the result of nondiscretionary federal spending. D) created by fluctuations in real GDP. E) that is the result of discretionary federal spending.
When investors buy more capital goods because the interest rates have fallen, the aggregate demand curve
A) shifts right. B) shifts left. C) does not shift. D) stays the same.
If it costs Con Ed approximately $20 per additional ton of air pollution abated, but it costs PG&E only $10 per additional ton of air pollution abated and a marketable pollution permit trades for $14 per ton,
A. both PG&E and Con Ed could gain by buying. B. PG&E could gain by buying and Con Ed could gain by selling. C. both PG&E and Con Ed could gain by selling. D. society would gain if PG&E would sell and Con Ed would buy.
Which of the following guides sensible decisions regarding the management of business risk in a market system?
A. The profit and loss system B. The "invisible hand" C. Taxes and subsidies D. Consumer sovereignty