The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk.
B) a reduction in maturity.
C) a flight to quality.
D) a flight to liquidity.
C
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The labor supply curve is backward bending because at higher wages the income effect eventually dominates the substitution effect
Indicate whether the statement is true or false
Under a fixed exchange rate regime, if a central bank must intervene to purchase the ________ currency by selling ________ assets, then, like an open market sale, this action reduces the monetary base and the money supply, causing the interest rate
on domestic assets to rise. A) domestic; foreign B) domestic; domestic C) foreign; foreign D) foreign; domestic
An option buyer
A) has a greater insurance benefit than the purchaser of a futures contract. B) bears the risk of unfavorable price movements. C) is purchasing a naked option if he or she does not also own the underlying asset. D) generally will incur a lower cost than will the purchaser of a futures contract.
Supposed you are hired to be a checker at a local grocery store. After ninety days of probation you become a member of the union. As a result you feel more secure about your job and work harder to be part of the team
This is a benefit of union membership that A) increases demand for union-made goods. B) decreases the demand for nonunion-made goods. C) increases worker productivity of union members. D) increases union dues.