The excess of the nominal interest rate over the TIPS interest rate is known as the
A. yield spread.
B. interest-rate differential.
C. break-even inflation rate.
D. term structure.
Answer: C
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People buy more of good 1 when the price of good 2 rises. These goods are
A) complements. B) substitutes. C) normal goods. D) inferior goods.
Why is the long-run average total cost (LRATC) curve called the planning curve?
A government mandated price increase for doodads will: a. decrease the quantity of doodads supplied but increase the quantity of doodads demanded. b. increase the quantity of doodads supplied but decrease the quantity of doodads demanded. c. increase the demand for doodads and decrease the supply of doodads
d. decrease the demand for doodads and increase the supply of doodads.
A lender faces a(n) ________ problem when the lender lends funds to a borrower for a specific purpose and the borrower then opportunistically uses the funds for another purpose.
A. external cost B. moral hazard C. adverse selection D. free?rider