Risk Premium refers to
A) the average difference over a long period of the interest rate on long-term bonds and the interest rate on the short-term federal funds rate.
B) the average difference over a long period of the interest rate on short-term financial instruments and the interest rate on the discount rates.
C) the difference between the corporate bond rate and the risk-free rate of Treasury bonds.
D) the difference between prime rate and the discount rate.
C
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In peak-load pricing,
A) marginal revenue is equal in both periods. B) marginal revenue in the peak period is greater than in the off-peak period. C) marginal revenue in the peak period is less than in the off-peak period. D) the sum of the marginal revenues is greater than the sum of the marginal costs.
Which of the following is not a condition of monopolistic competition?
a. firms produce a similar product b. products are differentiated c. advertising may exist d. each firm charges the same price for its output
Within the framework of the AD-AS model, an increase in savings by households will
a. increase the supply of loanable funds and reduce interest rates. b. be offset by a decrease in savings by businesses. c. cause long-run fluctuations in the rate of consumption. d. result in a decline in aggregate demand, output, and employment.
Which scenario best demonstrates how money functions as a unit of account?
a. Haley knows that a gel pen costs $1.50 and a jar candle is $9, so a candle is equal to six pens. b. Gregory gives Carlito $100 and receives a new pair of jeans in exchange. c. Miguel makes a payment on his car loan every month. d. Each quarter, Celeste deposits money into a Roth IRA to save for her retirement.