Consumers always prefer indifference curves that are ____ the origin.
A. closer to
B. tangent to
C. farther from
D. concave relative to
Answer: C
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What branch of economics involves the collection and use of data to test economic theories? Why is this task often more difficult in economics than it is in physical sciences?
What will be an ideal response?
If the expected path of 1-year interest rates over the next four years is 5 percent, 4 percent, 2 percent, and 1 percent, then the expectations theory predicts that today's interest rate on the four-year bond is
A) 1 percent. B) 2 percent. C) 3 percent. D) 4 percent.
Using an approximation to the UIP eqaution to determine the spot exchange rate, assume that the expected spot rate (after 1 year) for euros (in terms of dollars)= $1.50, the current interest rate on euro deposits is 2% and the current interest rate on dollar deposits is 6%. What current spot for euros would satisfy the equation?
a) $1.5*(1+2%)= $1.53 b) $1.5*(1-2%)= $1.47 c) $(1.5/(1+4%)= $1.442 d) $(1.5/(1-4%)= $1.563
The value of $100 left in a savings account earning 5% a year, will be worth what amount after ten years?
A. $160.50 B. $150.00 C. $162.89 D. $159.84