Suppose a one-year discount bond offers to pay $1000 in one year and currently has a 15% interest rate. Given this information, we know that the bond's price must be
A) $869.56.
B) $1150.
C) $850.
D) $950.
E) none of the above
A
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Job rationing occurs when the real wage rate is
A) above the equilibrium wage rate so there is a shortage of labor. B) above the equilibrium wage rate so there is an excess supply of labor. C) equal to the equilibrium wage rate so there is no excess supply of labor. D) below the equilibrium wage rate so there is an excess supply of labor. E) Both answers A and D are correct because whenever the real wage rate is above or below the equilibrium wage rate, there is an excess supply of labor.
Which is FALSE about perfect competition?
A) There are numerous sellers. B) Market entry and exit is unrestricted. C) There is no ability to set price. D) There is considerable product differentiation.
Under what conditions will decentralization be beneficial?
What will be an ideal response?
The Lucas supply function states that real output can change from its fixed level
A. only if there is a positive price surprise. B. only if there is a negative price surprise. C. only if there is no price surprise. D. Both A and B are possible.