Income tax payments
a. rise during a recession, thus reducing the severity of the recession
b. rise during a recession, thus increasing the severity of the recession
c. rise during inflationary episodes, thus reducing the severity of the inflation
d. fall during inflationary episodes, thus increasing the severity of the inflation
e. fall during a recession, thus increasing the severity of the recession
C
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If the yield curve slope is flat for short maturities and then slopes steeply upward for longer maturities, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting
A) a rise in short-term interest rates in the near future and a decline further out in the future. B) constant short-term interest rates in the near future and further out in the future. C) a decline in short-term interest rates in the near future and a rise further out in the future. D) constant short-term interest rates in the near future and a decline further out in the future.
The supply curve of U.S. dollars is drawn assuming other things constant, such as
a. income in the rest of the world b. expectations about the rate of inflation in the United States relative to the rest of the world c. U.S. tastes and preferences for foreign goods d. the interest rate in the United States relative to the rest of the world e. tastes and preferences of the rest of the world for U.S. goods and services