If the term structure of interest rates in two countries differ, the differences reflect
A) expected price levels over time.
B) expected GDP differences.
C) the absence of covered interest arbitrage.
D) expected exchange rate changes over time.
D
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Firms pay famous individuals to endorse their products because
A) famous people only consume high-quality products. B) apparently demand is affected not just by the number of people who use a product but also by the type of person that uses the product. C) famous people obviously know what are the best goods and services. D) the firms are irrational and are wasting advertising expenditures.
When the Fed decreases the money supply, the interest rate
a. rises b. falls c. remains unchanged d. rises during recessions only, otherwise remains unchanged e. falls during recessions only, otherwise remains unchanged