If the expectations theory of the term structure is correct, would a reduction in the supply of thirty-year Treasury bonds affect their yields?
What will be an ideal response?
No. According to the expectations theory, Treasury bonds of different maturities are perfect substitutes. If expectations of the future path of short-term rates remain unchanged, then a reduction in the supply of thirty-year bonds will not affect their yields.
Economics
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Which of the following taxes is collected only by the federal government?
A) Corporate income tax B) Social insurance tax C) Property tax D) Excise tax
Economics
Acme is a perfectly competitive firm. It has the total cost schedule given in the above table. Acme's product sells for $8.00 per unit. What amount of output is the most profitable and what is Acme's economic profit or economic loss?
What will be an ideal response?
Economics