According to the liquidity premium theory, a yield curve that is flat means that
A) bond purchasers expect interest rates to rise in the future.
B) bond purchasers expect interest rates to stay the same.
C) bond purchasers expect interest rates to fall in the future.
D) the yield curve has nothing to do with expectations of bond purchasers.
C
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Answer the following statement(s) true (T) or false (F)
1. A doubling of all prices has the same effect on the budget line as reducing income by half. 2. If the consumer's income doubles, then his optimal purchases of all goods will double. 3. If the consumer's income and all prices simultaneously triple, then his optimum will not change. 4. The slope of the budget line always equals the consumer's marginal value. 5. The budget line illustrates the consumer's opportunities and the indifference curve illustrates the consumer's preference.
Which of the following is an example of a voucher?
A) the postal service B) police services C) social security D) food stamps E) a patent on a pharmaceutical drug
On what type of income do many economists believe that people base their consumption?
Phyllis spends her income on beer and pretzels, and a six pack of beer costs the same as a bag of pretzels. If she is in consumer equilibrium, we know: a. she buys the same quantities of six packs of beer and bags of pretzels
b. she gets the same marginal utility from the last six pack of beer as from the last bag of pretzels. c. she gets the same total utility from beer as she does from pretzels. d. that all of the above are true.