Last year, Leah bought a bond for $1,000 that promises to pay $105 a year. This year, a person who buys a bond for $1,000 receives $95 a year. If Leah were to sell her (old) bond, its price would be approximately
A) $818.
B) $846.
C) $905.
D) $1,105.
E) $1,273.
D
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Refer to Figure 28-1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run?
A) Sell treasury bills. B) Increase the money supply. C) Lower the discount rate. D) Buy treasury bills. E) No policy will move the economy to point C in the long run.
The formal definition of price elasticity of demand is
A) change in quantity demanded divided by change in price. B) quantity demanded divided by price. C) percentage change in quantity demanded divided by percentage change in price. D) quantity demanded multiplied by price and divided by 100.
Procyclical policy:
What will be an ideal response?
Which of the following events would produce an upward shift in the consumption function, other things being equal?
A. an increase in consumer wealth B. a decrease in consumer wealth C. a decrease in autonomous consumption D. an increase in the price level