Your financial investments consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. If interest rates on newly-issued government bonds increase, then the price of your bonds will ________ and the price of the shares you own will ________.
A. increase; increase
B. decrease; decrease
C. decrease; not change
D. increase; not change
Answer: B
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The marginal rate of substitution is determined by the slope of an indifference curve
Indicate whether the statement is true or false
Everything else held constant, when financial frictions increase, the real cost of borrowing ________ so that planned investment spending ________ at any given inflation rate
A) increases; falls B) decreases; falls C) decreases; rises D) increases; rises
The price elasticity of demand for a rental home in Luxury Resorts in the summer is 1.40 and is 2.60 in the spring. If Luxury Resorts faces a constant marginal cost of $600 per home rental, what is the profit-maximizing off-peak load price to charge in the spring?
A) $975 B) $2,100 C) $575 D) $850
A nation's GDP can be calculated as
A. The sum of value added and intermediate goods. B. The total value added at all stages of production. C. PI plus depreciation. D. NI plus depreciation.