When an economy faces an inverted yield curve, compared to short-term bonds, the long-term bonds:
A. are riskier.
B. are a safe investment.
C. pay higher interest rates.
D. pay lower interest rates.
Answer: D
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Why do firms enter into a collusive agreement?
A) To increase profits B) To reduce prices C) To reduce market concentration D) To increase market supply
Perfect competition does not assume that
a. buyers are well informed about products and prices. b. free entry into and exit from the market exists. c. no individual buyer or seller can influence a price. d. all firms operate at the same cost.
Given the strict quantity theory of money, if the quantity of money were decreased by 50 percent, prices would:
a. fall by 50 percent. b. rise by 50 percent. c. increase by 100 percent. d. decrease by 100 percent.
There is an exchange rate between
a. every pair of currencies. b. the world's major currencies but not between the currencies of less-developed countries. c. currencies on a fixed-exchange rate system but not for those on a floating-rate system. d. the currencies of the European Union but not for the nations outside the European Union.