Suppose you are deciding whether to buy a particular bond. If you buy the bond and hold it for 4 years, then at that time you will receive a payment of $10,000 . If the interest rate is 6 percent, you will buy the bond if its price today is no greater than
a. $8,225.06.
b. $7,920.94.
c. $7,672.58.
d. $6,998.98.
b
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Which of the following is necessarily true when an economy is in long-run equilibrium?
a. Prices will be constant (that is, inflation will be zero). b. The actual output will be less than the full-employment (or potential) output. c. The actual rate of unemployment equals the natural rate of unemployment. d. The output of the economy will be greater than the full-employment output.
Costs of production that do not change with the rate of output are:
a) Nonexistent. b) Marginal costs. c) Variable costs. d) Fixed costs.
When the Russian government defaulted on its bonds in August 1998:
A. risk spreads did not change. B. risk spreads decreased significantly. C. yields on U.S. Treasury securities fell while yields on corporate bonds rose. D. yields on U.S. Treasury securities rose while prices of corporate bonds rose.