In equilibrium, if both uncovered and covered interest parity hold, what condition should exist?
a. World interest rates will be equal.
b. Rates of inflation will equalize.
c. The forward rate will equal the expected future spot rate.
d. The forward rate will decrease as the spot rate rises.
Ans: c. The forward rate will equal the expected future spot rate.
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The law of supply reflects the fact that
A) people buy more of a good when its price falls. B) suppliers have an incentive to use their resources in the way that brings the biggest return. C) the demand curve is downward sloping. D) higher prices are more attractive to consumers because they signal a higher quality product. E) businesses can sell more goods at lower prices.
Consider a situation where economic theory suggests that you impose certain restrictions on your estimated multiple regression function
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Possibly, the most serious flaw in the Medicare system is the fact that
a. the deductible is too high for most elders to afford. b. it provides no real protection against catastrophic losses resulting from unusually long hospital stays. c. the definition of an episode of illness can lead to patients paying the deductible more than once during the calendar year. d. coverage for outpatient drugs is poor. e. elders are required to pay monthly premiums to participate in Part B.
From 1998 to 2010, the cost of electricity produced with nuclear power has ________ and the cost of electricity produced with solar power has ________.
A. increased; increased B. increased; decreased C. decreased; increased D. decreased; decreased