Suppose you purchase a one-year bond that has a $450 coupon and a face value of $5,000, and immediately after you purchase the bond, new bonds are issued that are otherwise identical, except they have coupons of $375
If you sell your bond, you will A) suffer a loss of $5.76.
B) suffer a loss of $412.84.
C) receive a gain of $69.77.
D) receive a gain of $418.60.
C
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Contractionary fiscal policy involves decreasing government purchases or increasing taxes
Indicate whether the statement is true or false
According to the Coase theorem, there will be an efficient solution to the problem of toxic waste: a. if the creator of the toxic waste is assigned the property right and the bargaining costs are high. b. if the victim of toxic waste is assigned the property right and the bargaining costs are high. c. regardless of which party is assigned the property right if bargaining costs are small
d. if the property rights are shared equally between the creator and the victim of the toxic waste.
Which of the following changes best represents the effect of the oil embargo (a shut-off of oil from certain OPEC countries) of the 1970s on the U.S. economy?
What will be an ideal response?
Unexpected inflation can often
A. reduce price levels below cost. B. help lenders collect payments in more valuable dollars. C. reduce wages below the inflation rate. D. help borrowers by allowing them to pay back lenders with less valuable dollars.