World War II led to a dramatic increase in economic growth in the United States because
a. the war caused the U.S. to move along its production possibilities frontier away from consumer goods and towards military goods
b. the economy was already at close to full employment
c. there were unemployed resources in the U.S. economy prior to the war
d. the economy shifted production towards more profitable consumer goods during the war
e. the opportunity cost of producing military goods increased considerably during the war years
C
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According to human capital theory, all of the following help make workers more productive EXCEPT
A) health and fitness. B) increased unemployment benefits. C) skills. D) education.
If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 9 percent, what is the most you can get for your old bond?
A) $917.43 B) $944.95 C) $970.87 D) $1,000
In what way does prospect theory differ from the standard theory of expected utility?
a. With prospect theory, preferences depend only on final wealth levels. b. With prospect theory, preferences vary with initial (reference) wealth levels. c. With prospect theory, individuals are risk loving over small losses. d. With prospect theory, risk aversion does not play a role.
Any theory of the term structure of interest rates needs to explain each of the following, except why:
A. the yields of different maturities tend to move together. B. short-term yields are usually higher than long-term yields. C. short-term yields are more volatile than long-term yields. D. long-term yields are usually higher than short-term yields.