According to the expectations hypothesis, if investors believed that, for a given holding period, the average of the expected future short-term yields was greater than the long-term yield for the holding period, they would act so as to drive:
A. down the price of the short-term bond and drive up the price of the long-term bond.
B. up the prices of both the short- and long-term bonds.
C. down the prices of both the short- and long-term bonds.
D. up the price of the short-term bond and drive down the price of the long-term bond.
Answer: D
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Which of the following statements is true about causes of business cycle fluctuations?
A. Economists all agree that monetary changes are primarily responsible for business cycle fluctuations. B. Economists all agree that supply shocks are the cause of most business cycle fluctuations. C. There are a wide range of theories as to the underlying causes of business cycle movements. D. Economists all agree that productivity shocks are the cause of most business cycle changes.
Which of the following is the main argument for why efficiency wages can help encourage workers to provide full effort on a job?
A. Workers do not understand that high-wage workers do not need to work hard to maintain their job. B. When the efficiency wage is less than the competitive wage, workers work harder in order to convince other firms to hire them away at the higher, competitive wage. C. Workers do not want to risk becoming unemployed when there is a reserve of involuntary unemployed workers willing to take their job that pays above the competitive wage. D. Management hires fewer workers at the higher efficiency wage, and therefore all workers must work harder. E. None of these provide an argument for why efficiency wages encourage workers to provide full effort on a job.
A dominant strategy is a
A. negative-sum strategy. B. player's best strategy when she can make the first move. C. last-mover strategy. D. player's best strategy regardless whatever strategies are adopted by the rivals.
Jose decides to join the Middle State University's football team when he learns that his health insurance will pay for any subsequent injury. This illustrates
A. a symmetric information problem. B. monopolistic behavior. C. oligopolistic behavior. D. a moral hazard problem.