If the expected path of 1-year interest rates over the next five years is 1 percent, 2 percent, 3 percent, 4 percent, and 5 percent, the expectations theory predicts that the bond with the highest interest rate today is the one with a maturity of

Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country B will tend to ________ and employment in country B will tend to ________

A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease

When the price of a normal good decreases, the ________ can be divided between the ________, which keeps the best affordable point on the same indifference curve and the ________, which moves the best affordable point farther away from the origin

A) substitution effect; price effect; income effect B) price effect; income effect; substitution effect C) income effect; substitution effect; price effect D) price effect; substitution effect; income effect