B5 Flashcards
1
Q
why would a 1 year maturity have a higher return than a 10 year maturity?
A
usually, longer maturities have higher returns. However, if inflation is expected to be lower in the future, then investors will offer a higher short term investment
2
Q
what does it mean when demand is price unit elastic?
A
changes in price have an equal change in quantity demanded thus having no effect on total revenue.
3
Q
what impact can raising the minumum wage rate have on the economy?
A
total employmnet will decrease because less employers want to pay a higher wage thus lessening quantity demanded and create a surplus of labor supply
