Normally, whenever the central bank lowers the rate it charges banks for overnight loans market rates of interest:
a. are not affected.
b. fall at the same rate.
c. increase.
d. are unstable.
Ans: b. fall at the same rate.
Economics
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The imposition of tariffs on imports results in deadweight (triangle) losses. These are
A) production and consumption distortion effects. B) redistribution effects. C) revenue effects D) efficiency effects. E) distortion of incentives.
Economics
If the three-month Treasury bill has an interest rate of 0.2%, the ten-tear Treasury bond has an interest rate of 2.75%, and a ten-year bond issued by Time Warner has an interest rate of 6%, what is the risk premium on Time Warner's bond?
What will be an ideal response?
Economics