You turn to the Treasury bond market page of a newspaper and look under the column headed "Bid" and see that it says, "125:8" this indicates that
A) the price that the buyer is willing to pay for this bond is $125.08.
B) the price that the buyer is willing to pay for this bond is $1,252.50.
C) the price that the seller is willing to sell this bond for is $125.80.
D) the price that the seller is willing to sell this bond for is $125.08.
B
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If the nominal interest rate increases without any change in the rate of inflation:
A) the ratio of real interest rate to nominal interest rate increases. B) the real interest rate increases. C) the real interest rate decreases. D) the real interest rate remains the same.
In the figure above, suppose the original budget line is BD. A rise in the price of a compact disc will
A) rotate the budget line to AD. B) rotate the budget line to CD. C) not move the budget line. D) result in a parallel leftward shift of the budget line.
One way to overcome the problem of the commons is to
A) assign property rights so that someone owns the resource. B) take away property rights so that no one owns the resource. C) leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used. D) None of the above answers is correct.
Which of the following statements is correct about a market in which pollution is emitted?
a. Both corrective taxes and pollution permits move the market toward the social optimum. b. Corrective taxes move the market toward the social optimum, but pollution permits do not move the market toward the social optimum. c. Pollution permits move the market toward the social optimum, but corrective taxes do not move the market toward the social optimum. d. Neither corrective taxes nor pollution permits move the market toward the social optimum.