Suppose it is 'breaking news' that interest rates will fall by a fixed amount for the indefinite future. Prices for a 10-year bond will _________ by _________ than prices for a 2-year bond.

rise, less

rise, more

fall, less

fall, more

Suppose that new firm entry in our model stopped completely at the end of Phase I. Then, as compared with the standard model where entry continues through II as well, the peak of the stock market would come ______ and the 'overshoot' of the stock market would be______.

later, less

sooner, less

later, greater

sooner, greater

It is common knowledge by time t-2 that a firm will have to sever its ties to some international markets at time t, lowering its world market share and earnings level permanently. If you bought the stock at t-1, you would receive _______ if you sold it at t+1. If you bought it at t and sold at t+2, you would receive a ________.

a capital loss, a capital gain

a capital gain, a capital loss

a capital loss, neither a gain or a loss

neither a gain nor a loss, a capital loss

neither a capital gain or loss, neither a capital gain or loss