The terrorist attack on the World Trade Center on September 11, 2001:
A. did not have any significant impact since the risk on all bonds increased.
B. caused the price of U.S. Treasury securities to fall and the yields on corporate bonds to fall.
C. caused the demand for U.S. Treasury securities to fall and the demand for corporate bonds to rise.
D. triggered a flight to quality in the bond market.
Answer: D
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Ritzland produces only one good. 10,000 units of the good were produced in Ritzland during a certain year and were sold at $42 per unit. The price of each unit of the good two years back was $37
i) Find the real and nominal GDP of Ritzland taking $37 as the base price. ii) Calculate the GDP deflator for Ritzland for the year in question.
Use the following statements to answer this question: I. The equal marginal principle may be used to characterize the maximum utility consumption decision even if the diminishing MRS assumption does not hold. II
The equal marginal principle implies that the MRS at the optimal consumption bundle is always equal to the price ratio. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.
In a very basic principal-agent model, output is contractible if:
A. the employee works in a team. B. the employee produces many products. C. output can be observed with some positive cost. D. the employee produces a single output.
An increase in real interest rate ………………cost of investment # randomize
A. Decreases B. Increases C. Does not affect D. Diminishes