The interest rate on a two-year security will continue to adjust until it is equal to
A. an average of the current one-year rate and the expected one-year rate for next year.
B. twice the interest rate on a one-year security.
C. the sum of the current one-year rate and the expected one-year rate for next year.
D. half the interest rate on a one-year security.
Answer: A
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A specialized rice grower sells rice in two markets, the United States and Japan, and the marginal cost is the same in both markets. The price elasticity of demand in the United States is -2.0, and the price elasticity of demand in Japan is -1.5
If the grower practices group price discrimination, which country's consumers will pay a higher price and by how much?
If a country cannot internationalize its debt, then it will have to:
A. buy more bonds domestically, causing its interest rates to rise. B. sell more bonds domestically, causing its interest rates to fall. C. buy more bonds domestically, causing its interest rates to fall. D. sell more bonds domestically, causing its interest rates to rise.
Why might firms pay wages that are above the equilibrium wage in a market?
A) to increase the productivity of their workers B) to reduce the unemployment rate C) to encourage workers to form labor unions D) to reduce profit
Refer to Figure 13-10. to answer the following questions
a. What is the profit-maximizing output level? b. What is the profit-maximizing price? c. At the profit-maximizing output level, how much profit will be realized? d. Does this graph most likely represent the long run or the short run? Why?