The simultaneous occurrence of high inflation and high unemployment is called
A. Reflation.
B. Stagflation.
C. Depression.
D. Deflation.
Answer: B
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If you own a $1,000 face value bond with one year remaining to maturity and a 7 percent coupon rate and new bonds are paying 11 percent, what is the most you can get for your old bond?
A) $1,028.85 B) $1,000.00 C) $963.96 D) $952.30
While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be
What will be an ideal response?
Adverse selection refers to the
A. possibility that the borrower may engage in riskier behavior after the loan is obtained. B. use of statistical discrimination in making loans. C. possession of information by one party in a financial transaction not known by the other party. D. likelihood that a potential borrower may use the funds that he receives for unworthy, high risk projects.
Keynes's liquidity preference theory indicates that the demand for money is
A) constant. B) positively related to interest rates. C) negatively related to interest rates. D) negatively related to bond values.