The above figure shows the production possibility frontier for a country. What is the opportunity cost to move from point D to point B?
A) 12 tons of rice
B) 15 thousand bottles of wine
C) 6 thousand bottles of wine
D) 9 thousand bottles of wine
E) Nothing, it is a free lunch.
A
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Suppose that you could buy a one-year bond today, which has an interest rate of 3%. If you wait a year and buy a one-year bond then, the interest rate will be 4%. Two years from now, a one-year bond is expected to offer an interest rate of 5%
According to the expectations theory of the term structure of interest rates, what is the interest rate on a two-year bond today? What is the interest rate on a three-year bond today?
An auxiliary regression refers to a regression that is used:
A. when the dependent variables are qualitative in nature. B. when the independent variables are qualitative in nature. C. to compute a test statistic but whose coefficients are not of direct interest. D. to compute coefficients which are of direct interest in the analysis.
How can the demand for one good be affected by increased demand for another one?
(A) When goods are bought together, increased demand for one will decrease demand for the other. (B) A drop in price for a good will increase demand for the good and its substitute. (C) If goods are used together, increased demand for one will increase demand for the other. (D) If goods are substitutes for each other, increased demand for one will increase demand for the other.
According to comparative advantage, trade between two countries
A. maximizes the amount of inputs that are used in the production of all products. B. allows each of the trading countries to allocate its resources most efficiently. C. guarantees that consumption levels will be equal in the two countries. D. will benefit all the industries in each of the countries.