A corporation issues a three-year bond with a coupon of $50 and a face value of $1000. A year later, market interest rates have declined to 4%. What is the price of the bond a year after it was issued? Report your answer to the nearest dollar
What will be an ideal response?
Since the price of the bond equals its present value, the price is $50/1.04 + $1050/(1.04)2 = $1019.
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The endogenous variable in the aggregate supply curve is ________
A) output B) the real interest rate C) inflation D) planned expenditure E) none of the above
Suppose a market were currently at equilibrium. A rightward shift of the supply curve would cause a(n)
A) increase in price but a decrease in quantity. B) decrease in price but an increase in quantity. C) increase in both price and quantity. D) decrease in both price and quantity.
From the neoclassical view, physical capital per person refers to the amount and kind of:
a. machinery and equipment available to help people get work done. b. processes and money available to help people get work done. c. equipment and labor available to help people get work done. d. labor and equipment available to help people get work done.
Long-term contracts are NOT efficient if:
A. the contractual environment is simple. B. specialized investments are unimportant. C. a firm engages in relationship-specific exchange. D. managers shirk.