Under the liquidity premium theory a flat yield curve implies:
A. long-term interest rates are higher than short-term interest rates.
B. there is no risk premium for longer-term maturities.
C. short-term interest rates are expected to remain constant.
D. short-term interest rates are expected to decrease.
Answer: D
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When price falls, demand rises.
Answer the following statement true (T) or false (F)
Which of the following is an important assumption about the labor market that is shared by both the original Keynesian model and the Friedman "Fooling Model?"
A) The supply of labor depends on expected real wages. B) The demand for labor is a function of nominal wages. C) Workers can be "off" their labor supply function in the short-run equilibrium. D) Firms can be "off" their labor demand function in the short-run equilibrium.
A bank run involves
A) a failure by a bank to get the maximum return on its investments. B) large numbers of depositors withdrawing their deposits within a short period of time. C) a bank being forced out of business. D) fraud on the part of a bank's managers.
Given a perfectly competitive market structure at the profit-maximizing output level, a firm's total fixed cost is $15, total variable cost is $137, marginal revenue is $4, and the quantity demanded is 65 . The total profit earned by the firm is $108
a. True b. False Indicate whether the statement is true or false