The default risk premium fluctuates mainly
A) because bond rating agencies tend to be inconsistent in their ratings of bonds.
B) because risk-neutral investors will often become risk-averse as time passes.
C) because taxes tend to rise over the long run.
D) as new information about a borrower's creditworthiness becomes available.
D
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An increase in the expected future marginal product of capital would cause the IS curve to
A. shift up and to the right. B. shift down and to the left. C. remain unchanged. D. remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
Complaints are often made to the International Trade Commission concerning foreign "dumping" practices. These complaints typically claim that
A) U.S. firms are harmed by the unfair pricing of foreign exporters. B) foreign companies are charging exorbitant prices that are higher than the true value of the products. C) foreign companies are charging prices that are lower than prices they charge countries other than the U.S. D) U.S. consumers are harmed by the lack of quality control or health concerns in foreign countries. E) U.S. consumers cannot differentiate between the foreign and domestic goods.
When the government levies a tax where everyone is taxed the same fixed percentage of their incomes, this tax is known as a(n):
a. regressive tax. b. progressive tax. c. proportional tax. d. excise tax. e. luxury tax.
Trade diversion is one reason that some economists:
a. believe we should not even other to promote free trade. b. recommend we change our focus from regional trade agreements to the WTO, a multilateral trade agreement. c. recommend we reinstate some tariffs that were actually beneficial to all nations. d. think we should exclude low-wage nations from trade agreements.