Assume that a security has two possible outcomes. There is a 50 percent chance that the yield will equal 12 percent and a 50 percent chance that the yield will equal 4 percent. The expected yield for this security is
A) 16 percent.
B) 12 percent.
C) 8 percent.
D) 4 percent.
C
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The tools of monetary policy are
A) government spending, tax rates, and the required reserve ratio. B) open market operations, differential between the discount rate and the federal funds rate, and the required reserve ratio. C) open market operations, differential between the discount rate and the federal funds rate, and tax rates. D) open market operations, government spending, and the required reserve ratio.
The definition of economic growth is the annual percentage
A) increase in the per capita real GDP. B) increase in the per capita nominal GDP. C) increase in the total nominal GDP. D) increase in total exports.
If government spending increases, which of the following is most likely to occur?
a. GDP, money demand, the interest rate, and investment spending will all increase. b. GDP, money demand, the interest rate, and investment spending will all decrease. c. GDP, money demand and the interest rate will increase, while investment spending will decrease. d. GDP, money demand and the interest rate will decrease, while investment spending will increase. e. GDP and money demand will increase, but the interest rate will not change.
The value of commodity money: a. fluctuates because its value is compared with the price of the commodity in international markets. b. fluctuates because its base commodity market value is flexible
c. remains stable because a particular commodity always yields the same level of utility. d. remains constant because the production of the commodity used as money is restricted to limited hands.