Suppose the interest rate on a bond is 12.5 percent and that bond pays $90 a year in interest and sells for $720 . If the supply of bonds increases and the price of the bond falls to $600, the interest rate will ____ to ____
a. increase; 15 percent
b. increase; 17.5 percent
c. decrease; 7.5 percent
d. decrease; 10 percent
e. increase; 13 percent
a
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Most businesses probably claim they use cost-plus-markup pricing because
A) they are price takers. B) they are maximizing net revenue. C) they have no better way to explain their price-setting behavior. D) they are responsible for long-run inflation.
What is meant by comparative statics? Is it different from the concept of marginal analysis? Explain with the help of suitable examples
What will be an ideal response?
When the Fed unexpectedly increases the money supply,
a. real interest rates will tend to decline. b. the exchange rate value of the dollar will tend to appreciate. c. aggregate demand will tend to increase. d. all of the above are correct. e. both a and c are correct.
If men, on average, earn 20 percent more than women in a particular occupation,
a. this is clear evidence of discrimination. b. some of this differential could be due to differences in educational levels. c. some of this differential could be due to differences in human capital. d. Both b and c are correct.