The prime interest rate:
A. affects investment spending while the federal funds rate affects consumption spending.
B. affects consumption spending while the federal funds rate affects investment spending.
C. has no effect on exchange rates and net exports.
D. affects investment spending while the federal funds rate affects overnight borrowing of
bank reserves.
D. affects investment spending while the federal funds rate affects overnight borrowing of
bank reserves.
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A firm has the following production function:
q = (L1/3 + K1/3)3 a. Determine the returns to scale for this function. b. Determine the MRTS. c. Determine the Elasticity of Substitution.
Suppose that the United States imposes a tariff of $500 per car on Japanese cars. The most likely effect will be to increase the price of cars in the United States by:
A) less than $500 per car, and decrease the price of cars in Japan by less than $500 per car. B) $500 per car. C) more than $500 per car. D) less than $500 per car without affecting the price of cars in Japan.
Which of the following is not a reason why the yield to maturity can differ from the current yield?
A. Because the yield to maturity considers the capital gain/loss. B. Because the current yield moves in the opposite direction from price. C. Because the current yield focuses only on the coupon payment and the purchase price. D. Because most bonds are not purchased for face value.
When a monopolist sells the same product at different prices and the prices are not related to cost differences, we have
A) monopoly pricing. B) marginal cost pricing. C) price discrimination. D) price differentiation.