Fluctuations in investment:
What will be an ideal response?
account for more of the variability in gross domestic product (GDP) than consumption.
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When the president of the Bank of America addresses Congress regarding lending standards in that industry, he is discussing
A) a macroeconomic topic. B) a microeconomic topic. C) incentives. D) the big tradeoff.
Bond covenants are used to address the riskiness of bonds
Indicate whether the statement is true or false
At the beginning of 2006 the yield curve was usually flat, and sometimes downward sloping (inverted). This raised concerns that a recession might be on the way. But the slope of the yield curve is only part of the story. What else is important?
What will be an ideal response?
Suppose two firms produce close substitutes such that reducing the price of one product reduces the quantity demanded of the other. If those two firms merge:
A. they can earn higher profits by continuing to sell both products if the profit gained from increased sales of one product are greater than the lost profits from reduced sales of the other product. B. they will eliminate the less profitable product and sell only one. C. they will raise prices on both products. D. they will be unable to earn higher profits because the two products will compete against each other.