Risk that is related to the uncertainty about interest rate movements is called
A) default risk.
B) interest-rate risk.
C) the problem of moral hazard.
D) security risk.
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Fiscal policy makers may indirectly control the money supply if
A) they vote to "print" more dollars B) the Fed targets interest rates C) the Fed "prints" money as cyclical deficits increase D) the budget deficit is a structural deficit
We say that equilibrium in a perfectly competitive market is allocatively efficient because
a. the sum of consumer and producer surplus is maximized b. the sum of consumer and producer surplus is minimized c. the sum of consumer and producer surplus is zero d. consumer surplus is maximized e. producer surplus is zero
Look at the following data: The frictional unemployment rate is 1.5 percent, the natural unemployment rate is 4.5 percent, and the cyclical unemployment rate is -1 percent. The structural unemployment rate is _________ percent and the actual unemployment rate (in this economy) is ___________ percent
A) 6; 3.5 B) 3; 5.5 C) 3; 3.5 D) 6; 5.5