Refer to Figure 10.7. A movement from point A to point D could be caused by
A) a positive demand shock accompanied by an increase in the default-risk premium.
B) a decrease in consumer confidence accompanied by a decrease in the expected rate of inflation.
C) a negative demand shock accompanied by an increase in the target interest rate.
D) an increase in consumer confidence accompanied by a decrease in the term premium investors expect in the future.
A
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Suppose the best investment you could make with $100,000 in cash is to purchase a government bond that pays 14 percent interest per year
If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost of this financial capital is A) $1,400 per year. B) $100,000 per year. C) $14,000 per year. D) zero, because you already had the $100,000.
All of the following conditions must exist for the median-voter theorem to hold except that:
A. there is a single one-dimensional policy question. B. candidates win by majority vote. C. there are only two candidates. D. the policy being voted on must be uncontroversial.
Producers will change their prices when GDP is at the equilibrium level
a. True b. False Indicate whether the statement is true or false
A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager believes there is a 33 percent chance the recession will end in six months and profits will return to $100 million. However, there is a 67 percent chance the recession will not end in six months, resulting in a $7 million loss. The expected profits over the next six months are:
A. $33 million. B. $28.31 million. C. ?$2.31 million. D. $64.69 million.