Suppose that the one-year Treasury bill rate in the United States is 6%, the one-year government bond rate in Canada is 4%, and investors expect the U.S. dollar to depreciate against the Canadian dollar by 4% over the coming year
Is the nominal interest rate parity condition violated?
Not if investors have a preference for U.S. securities over Canadian securities. In this example there is an implied currency premium of 2%.
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If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,
A) there will be excess demand. B) there will be excess supply. C) the curves will shift to make a new equilibrium at the regulated price. D) None of the above.
Which of the following will cause the demand curve for cable TV services to shift to the left?
A) a rise in the price of cable TV services B) a decrease in average incomes of cable TV subscribers C) an increase in population D) the creation of several hit TV series
The government would use production taxes to remedy the problem of substantial:
a. internal benefits of production. b. external benefits of production. c. external costs of production. d. external benefits of consumption e. external costs of consumption.
What is the natural level of output?