Assume the interest rate on a current one-year bond is 3%, and the expected interest rate on the one-year bond one year from now is 6%. If the term premium on a two-year bond is 0.5%, then the interest rate on the two-year bond will be
A) 4%.
B) 4.5%.
C) 5%.
D) 6.5%.
C
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Which of the following is true?
A) Real GDP fluctuates around potential GDP. B) Potential GDP fluctuates around real GDP. C) Nominal GDP fluctuates around real GDP. D) Real GDP fluctuates around nominal GDP. E) When real GDP equals potential GDP, both equal nominal GDP.
"All else constant, consumers will purchase more of a good as the price falls." This statement reflects the behavior underlying:
A. a change in supply. B. the supply curve. C. the demand curve. D. a change in demand.
During business contractions, the growth rate of Solow residuals is ________
A) near or below zero B) well above zero C) approaching infinity D) impossible to calculate
Clifford lives by the motto "Eat drink and be merry today, for tomorrow doesn't matter
" If today's consumption is represented by "x" and tomorrow's consumption is represented by "y", then which of the following best represents Clifford's utility function? A) U = x - y B) U = x/y C) U = x D) U = y