Pat pays $10,000 for a newly issued two-year government bond with a $10,000 face value and a 6 percent coupon rate. One year later, after receiving the first coupon payment, Pat sells the bond. If the current one-year interest rate on government bonds is 5 percent, then the price Pat receives is:
A. $500.
B. greater than $10,000.
C. less than $10,000.
D. $10,000.
Answer: B
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To determine the price elasticity of demand, we
A) need information on consumers' incomes. B) need to know how much is available. C) compare the percentage change in the quantity demanded to the percentage change in the price. D) compare the change in the quantity to the change in price. E) divide the quantity by the price.
With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income
Indicate whether the statement is true or false
Excess reserves immediately decrease if
A) reserve requirements increase. B) reserve requirements decrease. C) the discount rate increases. D) the discount rate decreases.
A change in quantity demanded of a good always results from a change in
a. income b. tastes c. the price of the good d. both income and tastes e. the price of other goods