Does the expectations hypothesis allow for people to have a preference for longer-term investments? Explain
What will be an ideal response?
Not really, a key assumption of the expectations hypothesis is that bonds of different maturities are perfect substitutes, which basically implies that investors are indifferent between different maturities and that the yield of consecutive short-term investments will equal the yield of a long-term investment over the same investment horizon.
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Political instability is an obstacle to development in:
A. both market and socialist economies. B. neither market nor socialist economies. C. market economies. D. socialist economies.
Recall the Application about the short-run and long-run elasticity of supply of coffee to answer the following question(s). Recall the Application. What is the reason identified in the Application regarding why the short-run elasticity of supply of coffee is more inelastic than in the long run?
A. It takes at least 3 years for a newly planted coffee bush to yield marketable beans. B. Coffee production is capital intensive, and the farmers cannot afford the additional capital. C. Fertilizers are expensive in countries that produce coffee. D. The government controls the supply of coffee in those countries.
If a defined contribution pension cannot, for whatever reason, make good on their anticipated payments to retirees, the
A. retirees get an extra payment from Social Security. B. pensions are paid by the Pension Guaranty Trust Corporation. C. retirees must sue their former employer. D. retirees are out of luck.
Refer to the table above. What is the total cost incurred per month if Ryan rents Apartment 3?
A) $2,000 B) $2,050 C) $2,150 D) $2,270