A bond with no expiration has an original price of $10,000 and a fixed annual interest payment of $1,000. If the price of this bond increases by $2,500, the interest rate in effect will
A. decrease by 1 percentage point.
B. increase by 1 percentage point.
C. increase by 2 percentage points.
D. decrease by 2 percentage points.
Answer: D
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Between 1981 and 1986, as the federal budget deficit increased,
A. consumption spending fell. B. investment spending was crowded out. C. net exports increased. D. net exports were crowded out.
If the price of chicken rises from $1.25 per pound to $1.75 per pound, and the quantity demanded goes from 250 pounds per day to 175 pounds per day, this illustrates
A. the law of diminishing returns. B. the law of supply. C. the law of demand. D. the law of supply and demand.
Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. If Bobby maximizes utility from these goods, his total utility is ________ units
A) 705 B) 750 C) 770 D) 880
Last year the Jones family earned $40,000 . This year their income is $42,000 . In an economy with an inflation rate of 10 percent, which of the following is correct?
a. The Jones' nominal income and real income have both fallen. b. The Jones' nominal income and real income have both risen. c. The Jones' nominal income has increased and their real income has fallen. d. The Jones' nominal income has decreased and their real income has risen.