A recent purchaser of a bond that agrees to pay an annual nominal amount would hope that interest rates do not rise
What will be an ideal response?
True, for two reasons. First, the person is locked into a lower interest rate. Second, if the person needs to sell the bond, he will incur a loss since at higher interest rates, bond prices fall.
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If the government reduces expenditure on goods and services by $30 billion, then aggregate demand
A) increases by $30 billion and real GDP increases. B) decreases by more than $30 billion and real GDP decreases. C) increases by more than $30 billion and real GDP increases. D) decreases by $30 billion and real GDP decreases. E) increases and potential GDP increases.
Consumers make all economic decisions in a mixed economy
Indicate whether the statement is true or false
Pepsi and Coke have competed in the market for bottled water primarily on the basis of convenience and product differentiation as a means to avoid the negative effects on revenue that result from price competition
Indicate whether the statement is true or false
In which of the following situations will both market clearing price and the equilibrium quantity increase?
A) an increase in demand with no change in supply B) an increase in supply with no change in demand C) a decrease in supply with no change in demand D) a decrease in demand with no change in supply