The ________ of the term structure of interest rates states that the interest rate on a long-term bond will equal the average of short-term interest rates that individuals expect to occur over the life of the long-term bond, and investors have no
preference for short-term bonds relative to long-term bonds. A) segmented markets theory
B) expectations theory
C) liquidity premium theory
D) separable markets theory
B
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The United States can use all of its resources to produce 50 computers or 4,000 shoes. Suppose that at world market prices, one computer exchanges for 100 shoes. Explain how the United States can gain from trade
What will be an ideal response?
Questions that address what did, will or would actually happen are called ________ questions.
A. normative B. positive C. efficiency D. equity
Which of the following makes short-term conditional low-interest loans to LDCs?
A. World Bank B. Agency for International Development (AID) C. Agency for International Finance (AIF) D. International Monetary Fund (IMF)
Assume that the price overestimates the value that society places on the flu vaccine. If firms produce where P = MC, firms will be producing ________ the socially efficient amount of flu vaccine.
A. less than B. more than C. exactly D. sometimes more than and sometimes less than