Suppose you buy a bond with a face value of $1,000 for $800. What is the interest rate you receive on the bond?
A) 0.8%
B) 1.25%
C) 20%
D) 25%
Ans: D) 25%
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The GDP price index
A) can be interpreted as 100 multiplied by real GDP divided by nominal GDP. B) is the difference between nominal GDP and real GDP. C) measures the average price level. D) can be interpreted as real GDP minus nominal GDP and the resulting difference then multiplied by 100. E) is equal to between real GDP minus nominal GDP.
The ________ the Herfindahl-Hirschman Index, the ________
A) lower; more concentrated the industry B) higher; more concentrated the industry C) higher; less concentrated the industry D) lower; higher the profits earned in the industry
This method of financing government spending is frequently called printing money because high-powered money (the monetary base) is created in the process
A) financing government spending with taxes B) financing government spending through a Treasury sale of bonds that are then purchased by the Fed C) financing government spending by selling bonds to the public, which pays for the bonds with currency D) financing government spending by selling bonds to the public, which pays for the bonds with checks
The Fed's inability to instantaneously observe changes in inflation and economic growth result in
A) information lag. B) impact lag. C) policy lag. D) jet lag.