If the level of interest rates increases, then the current value and price of a bond paying a fixed interest payment will
A) remain unchanged since its underlying value, the interest payment is fixed.
B) fall since new bonds offer higher rates.
C) rise since new bonds offer higher rates.
D) first rise then fall as bond investors calculate the effects of the change in rates.
B
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A major cause of environmental degradation in developing countries is
(a) debt for nature swaps. (b) poverty. (c) a lack of public transportation. (d) land reform.
During a recession, total public assistance payments and unemployment compensation payments automatically increase while income taxes automatically decrease. Which of the following best describes the effect of these changes on aggregate demand? a. Aggregate demand will be less than it would be without these automatic stabilizers. b. Aggregate demand will be the same as it was before the
recession. c. Aggregate demand will be more than it would be without these automatic stabilizers. d. Aggregate demand will be greater than it was before the recession.
The design of tax policy is one of the responsibilities of economists who work at the
a. Council of Economic Advisers. b. Federal Reserve. c. Department of the Treasury. d. Congressional Budget Office.
Which action could the Fed use to decrease the money supply?
A. an open market purchase B. an increase in the required reserve ratio C. a tax increase D. a decrease in the discount rate