Suppose you purchase a bond with a 5 percent risk-free rate that matures in three years. The bond pays $250 at the end of each year and a principal amount of $2,000 on maturity. The present value of the bond is
A. $3,000.
B. $2,408.51.
C. $3,433.62.
D. $2,123.
Answer: B
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Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one ticket rises from $10 to $19
A) only three tickets will be sold. B) consumer surplus decreases from $31 to $6. C) no one will buy a ticket. D) consumer surplus increases from $44 to $71.
Selling at unreasonably low prices in order to destroy competing firms is known as
a. administered pricing. b. price discrimination. c. collusive practices. d. predatory pricing.
Crowding out will lead to a decrease in supply of loanable funds, a decrease in real interest rates, and subsequently a decrease in spending by households and firms
a. True b. False Indicate whether the statement is true or false
Recent changes in methods used to compute the CPI have made the
a. upward bias in the CPI inflation rate more severe than it used to be. b. upward bias in the CPI inflation rate less severe than it used to be. c. downward bias in the CPI inflation rate more severe than it used to be. d. downward bias in the CPI inflation rate less severe than it used to be.