While trade restrictions for a small country do provide gains to certain segments in the economy, in a second-best world such restrictions will always lower national welfare for a small country.
Answer the following statement true (T) or false (F)
False
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Short-term loans between banks are called
A) federal funds. B) repurchase agreements. C) repos. D) discount loans.
Which of the following best describes an adverse outcome of short-term government deficits?
a. In the short run, a government that runs a small budget deficit can shift aggregate demand to the right and trigger severe inflation. b. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the left and trigger severe inflation. c. In the short run, a government that runs a very large budget deficit can shift aggregate demand to the right and trigger severe inflation. d. In the short run, a government that runs a small budget deficit can shift aggregate demand to the left and trigger severe inflation.
Assume the Expectation Hypothesis regarding the term structure of interest rates is correct. Then, if the current one-year interest rate is 4% and the two-year interest rate is 6%, then investors are expecting the future one-year rate to be:
A. 8%. B. 6%. C. 5%. D. 4%.
Subway is a fast-food restaurant chain. Which of the following would be a long-run decision for Subway?
A. hire one more worker in a restaurant location B. supply more subs in one restaurant C. replace the manager of a restaurant D. open a new restaurant in a city