The term structure of interest rates
A) represents the relationship among the interest rates on bonds that are otherwise similar but that have different maturities.
B) reflects differing tax treatment received by different instruments.
C) always results in an upward-sloping yield curve.
D) usually results in a downward-sloping yield curve.
A
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If commercial banks are increasing their borrowing from the Fed while the Fed is selling government securities, the borrowing of the commercial banks from the Fed will tend to:
a. reinforce the contractionary open market operations policy. b. reinforce the expansionary open market operations policy. c. counteract the contractionary open market operations policy. d. counteract the expansionary open market operations policy.
A required reserve ratio of 7 percent gives rise to a simple deposit multiplier of
A) 14.29. B) 83.33. C) 1.43. D) 93. E) 7.
In the above figure, starting at E3, if there is an increase in technology that causes a temporary increase in production capabilities
A. aggregate supply would shift to SRAS1 and LRAS1 would shift to LRAS1. B. aggregate supply would shift to SRAS2 and LRAS1 would shift to LRAS1. C. aggregate supply would shift to SRAS1 and then return to SRAS2. D. aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0.
Suppose that a dramatic technological breakthrough related to nuclear fusion occurs so that the cost of energy is significantly reduced. We would expect that the immediate effect of this technological advance is
a. a shift to the right in most demand curves b. a decrease in the demand for automobiles c. a shift to the right in most supply curves d. to cause long-run supply curves to become steeper e. to increase the price of fossil fuels