The Treasury yield curve will be downward sloping when
A) investors expect future short-term interest rates to be significantly lower than current short-term interest rates.
B) investors expect future short-term interest rates to be significantly higher than current short-term interest rates.
C) short-term interest rates are significantly lower than long-term interest rates.
D) short-term interest rates are equal to long-term interest rates.
A
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To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, the area that equals the lost consumer surplus from this tax on sports equipment is
A) bcd. B) P1P2cd. C) P2P3ec. D) ced.
Investment demand is downward sloping because as the interest rate decreases,
A) each project's internal rate of return decreases. B) each project's internal rate of return increases. C) more projects will have an internal rate of return that exceeds the interest rate. D) more projects will have an internal rate of return that is less than the interest rate.
Which fundamental economic question is most closely related to the issues of income distribution and poverty?
A. The What to Produce question. B. The Why to Produce question. C. The How to Produce question. D. The For Whom to Produce question.
If an agricultural market is perfectly competitive, which of the following types of behavior might be expected?
A. Economic profits encourage entry. B. Collusion in restraint of trade. C. Price wars. D. Advertising.