Which of the following is true?
i. When the world price of a good is lower than the price that balances domestic supply and demand, a country gains from exporting the good.
ii. Compared to a no-trade situation, imports make consumers better off.
iii. Quotas raise the domestic price of imported goods.
A) Only i B) Only ii C) Only iii D) i and ii E) ii and iii
E
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Which of the following groups of people are counted as employed?
a. People who work at least one hour a week. b. People who work at least 15 hours a week as unpaid employees of a family business. c. People who are out of work due to bad weather. d. All of these are counted as employed.
The federal funds rate is closely tied to many interest rates on many types of loans. Which one is the exception?
a. Auto loan rates b. Adjustable rate mortgages c. Adjustable rate home equity loans d. 30-year Treasury bonds e. Business loans
Which of the following statements is correct?
a. If the inflation rate is steady at 5 percent, for example, the real and nominal interest rates will be equal. b. An increase in the demand for goods now compared with goods in the future would cause the real interest rate to rise. c. A "positive rate of time preference" means that an individual would rather save than consume. d. During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.
Suppose the yield curve is initially horizontal. Suppose the current one-year interest rate increases by 4% while the expected future one-year interest rate does not change. Which of the following will tend to occur?
A) i2t will increase by 4% B) i2t will increase by 2% C) i2t will increase by less than 2% D) i2t will decrease by 2%