A bond is a(n):
A. regular payment made to owners of a firm.
B. legal promise to repay a debt.
C. agreement issued by a financial intermediary linking savers and investors.
D. claim to partial ownership of a firm.
Answer: B
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Which of the following is not typically true of Employment Protection Legislation (EPL)?
a) countries with strong EPL have low unemployment rates b) EPL reduces part-time work and labor force participation rates c) EPL reduces the layoff rate d) EPL reduces the duration of unemployment e) EPL benefits the employed at the expense of the unemployed
An example of discretionary fiscal policy would be
A. an interest rate increase implemented to control inflationary pressures. B. the operation of the welfare state. C. the operation of the progressive federal income tax. D. a tax increase adopted to control inflationary pressures.
Economists and policy makers are committed to encouraging a high and growing level of real GDP because:
A. This implies a lower price level B. This means a higher level of unemployment C. This implies an increase in investment D. This means greater consumption opportunities
Suppose that Paola Flygare, producer of the Flygare fiberglass bass boat, produces 8,000 bass boats, but consumers want 13,000 bass boats. Assuming other producers have also underproduced for the market, the most plausible consequence is
a. an increase in overall production and an increase in the economy's is unemployment b. a cutback in overall production and an increase in the economy's unemployment c. an increase in real GDP and a decrease in the economy's unemployment d. an increase in real GDP and an increase in the economy's unemployment e. no change, because Flygare will not alter its production plans due to short-run market changes