As default risk increases, the expected return on corporate bonds ________, and the return becomes ________ uncertain, everything else held constant
A) increases; less
B) increases; more
C) decreases; less
D) decreases; more
D
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Refer to Table 12-4. If the market price is $45 the firm will produce
A) 60 units. B) 80 units. C) 100 units D) 120 units
The interest parity condition indicates that the interest differential is equal to the
A) risk premium. B) forward premium. C) futures premium. D) arbitrage premium.
The marginal cost of catching a fish is the same as the average total cost at your current level of 3,000 fish. If the price you receive for fish is greater than the marginal cost of the 3,000th fish, you should
a. add another boat to your fleet b. decrease production until MC = MR c. increase production until MC = MR d. stop production at 3,000th fish e. decrease production until the marginal cost of the next unit is enough to pay for the workers, bait, and fuel
Which of the following effects provide incentives for consumers to spend less when the price level rises?
a. the wealth effect and the interest-rate effect b. the wealth effect but not the interest-rate effect c. the interest-rate effect but not the wealth effect d. neither the wealth-effect nor the interest rate effect