Over the next three years, the expected path of 1-year interest rates is 4, 1, and 1 percent. The expectations theory of the term structure predicts that the current interest rate on 3-year bond is
A) 1 percent.
B) 2 percent.
C) 3 percent.
D) 4 percent.
B
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Comparative advantage is most closely related to which of the following concepts?
A) efficiency B) opportunity cost C) fairness D) productivity E) competition
Refer to Scenario 12.2. In this game, if both players end up playing their weak strategies, then
A) Eliza will donate a kidney and Jerome will not donate. B) both Eliza and Jerome will donate a kidney. C) Jerome will donate a kidney and Eliza will not donate. D) neither Eliza nor Jerome will donate a kidney.
When the Fed ________ securities in an open market operation, banks' reserves ________, and therefore lending ________
A) sells; increase; increases B) buys; increase; increases C) sells; decrease; increases D) buys; decrease; decreases E) buys; do not change; does not change
Which of the following macroeconomic schools of thought has dominated the economics profession from the 1940s through the 1960s?
a. New classical economics b. Classical economics c. Keynesian economics d. Rational economics e. Positive economics