One year before maturity, the price of a bond with a principal amount of $1,000 and a coupon rate of 5 percent paid annually fell to $981. The one-year interest rate must be:
A. 7 percent.
B. 8.5 percent.
C. 1.9 percent.
D. 5 percent.
Answer: A
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The quantity theory of money:
A) assumes that the ratio of money supply to nominal GDP decreases over time. B) assumes that the ratio of money supply to nominal GDP increases over time. C) is a representation of how a change in money supply affects the price level in an economy. D) is an exact representation of how the economy behaves in the long-run.
If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,500 on an income of $30,000, then over this range of income the tax is
A) regressive. B) proportional. C) progressive. D) There is insufficient information to answer the question.
Compare and contrast globalization as it existed in the late nineteenth century with globalization at the turn of the twenty-first century (i.e., today)
What will be an ideal response?
Supply-side economic policies seek to
A) raise interest rates through contractionary monetary policy. B) increase federal government expenditures. C) increase consumption expenditures by increasing taxes. D) increase saving and investment using tax incentives.