The interest rate on long-term bonds is somewhat higher than suggested by the expectations theory because
A) the expectations theory doesn't account for taxes.
B) a risk premium exists.
C) an inflation premium must be added to long-term bonds.
D) the Fed can only control short-term interest rates.
B
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Which of the following could be responsible for an increase in the price of wheat?
a. an increase in the supply of wheat b. an increase in the demand for wheat c. a decrease in the demand for wheat d. a simultaneous increase in supply and decrease in demand for wheat
Other fundamental things being equal, a decrease in the exchange rate value of the domestic currency will make domestic goods
A. less competitive in the international markets. B. less expensive in the domestic market. C. more in demand internationally. D. less expensive to produce.
The ________ automatically distributes scarce goods.
A. laissez-faire economy B. command economy C. barter system D. price system
If the poverty line is set too low, the official poverty rate will be
A. unaffected by this problem. B. higher than the true level. C. lower than the true level. D. negative.