The price of a coupon bond can best be described as the:
A. future value of the coupon payments.
B. present value of the face value plus the present value of the coupon payments.
C. future value of the coupon payments and the face value.
D. present value of the face value.
Answer: B
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People generally purchase less of a commodity as its price increases. This implies that the relationship between quantity purchased and the price of the commodity must have a
A. slope always equal to one. B. positive slope. C. zero slope. D. negative slope.
The Permanent Income and Life-Cycle Hypothesis imply that
A. the primary determinant of current consumption is permanent income. B. the primary determinant of permanent income is current consumption. C. consumers generally favor current consumption over future consumption. D. consumers are more likely to save if they are uncertain about the future.
The market value of a good or service is the:
A. price at which producers are willing to sell an output. B. government's valuation using the CPI. C. price at which it is bought and sold. D. None of these statements is true.
A higher rate of saving should lead to
A. higher current consumption. B. more investment, higher capital growth, and more future consumption. C. a higher price level and reduced future consumption. D. less growth.