Any theory of the term structure of interest rates needs to explain each of the following, except why:
A. the yields of different maturities tend to move together.
B. short-term yields are usually higher than long-term yields.
C. short-term yields are more volatile than long-term yields.
D. long-term yields are usually higher than short-term yields.
Answer: B
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Imagine that the federal government increases the minimum wage over the 2014 level. How would this action affect the graph?
a. WMIN would go lower, thereby increasing the labor surplus.
b. WMIN would go lower, thereby decreasing the labor surplus.
c. WMIN would go higher, thereby increasing the labor surplus.
d. WMIN would go higher, thereby decreasing the labor surplus.
The maintenance of a framework of security and order through the establishment and enforcement of rules under which people can interact peacefully with one another and be secure in their person and property is known as the
a. productive function of government. b. protective function of government. c. transfer function of government. d. illegitimate function of government.
If the typical firm in a perfectly competitive market was depicted in the graph below, what would be most likely to occur?
A. New firms would be likely to enter, increasing the market price. B. New firms would be likely to enter, decreasing the market price. C. Existing firms would be likely to exit, increasing the market price. D. Existing firms would be likely to exit, decreasing the market price.
What are the three main functions a central bank performs in its role as a bankers bank?
What will be an ideal response?