If real interest rates were 6% in country A and 4% in country B, the real interest rate in both countries will move toward 5%
a. True
b. False
Indicate whether the statement is true or false
True
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The Treasury yield curve will be downward sloping when
A) investors expect future short-term interest rates to be significantly lower than current short-term interest rates. B) investors expect future short-term interest rates to be significantly higher than current short-term interest rates. C) short-term interest rates are significantly lower than long-term interest rates. D) short-term interest rates are equal to long-term interest rates.
The price elasticity of demand for gasoline measures the:
a. responsiveness of gasoline producers to changes in the quality of gasoline. b. responsiveness of customers to changes in the price of gasoline. c. responsiveness of consumer preferences to changes in the quality of gasoline. d. both a and c above.
In a game of bargaining, the player who is willing to:
A. make the first move has more bargaining power and so receives a better payoff. B. hold out longer has more bargaining power and so receives a better payoff. C. be cooperative has more bargaining power and so receives a worse payoff. D. hold out longer has more bargaining power and so receives a worse payoff.
Refer to the data provided in Table 16.1 below to answer the following question(s).Table 16.1 shows the situation facing two firms, both of which are polluting. Assume that each firm emits 5 units of pollution.Table 16.1Firm AFirm AFirm AFirm BFirm BFirm BReduction of Pollution by Firm AMC of reducing pollution for Firm ATC of reducing pollution for Firm AReduction of Pollution by Firm BMC of reducing pollution for Firm BTC of reducing pollution for Firm B1$4$41$8$82 610212203 9193163641332420565185052480Refer to Table 16.1. Suppose the government wants to reduce the total amount of pollution from the current level of 10 to 4. To do this, the government caps each firm's emissions at 2 units and issues 2 permits to each firm. If firms are not allowed to trade permits, what is the
total cost of the pollution reduction? A. $30 B. $55 C. $58 D. $130