The bond dealer's spread is:
A. the difference between the current yield and the yield to maturity.
B. the asking price less the bid price.
C. the bid price less the asking price.
D. usually negative; the dealer makes a profit holding the bonds.
Answer: B
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Economists assume that individuals
A) prefer to live in a society that values fairness above all else. B) will never take actions to help others. C) are rational and respond to incentives. D) behave in unpredictable ways.
When using the economic efficiency approach to controlling air and water pollution, the government
a. forces each firm to produce emissions in the most cost efficient manner irrespective of its cost structure b. offers each firm the flexibility to reduce emissions in the most cost effective manner, given its unique cost structure c. offers each firm the option of choosing between the cost minimizing emission level and the profit maximizing emission level d. provides each firm with some fixed rules and then requires them to maximize profits given these fixed rules e. offers each firm the option of using marginal cost pricing and average cost pricing when determining the optimum emissions levels
Simplifying the budget document by concentrating only on major groupings and eliminating line items would: a. ensure that cabinet members spend more time on administering an approved budget and defending a proposed budget. b. require longer-term economic forecasts that are difficult to obtain
c. prevent elected officials from including projects they prefer for their personal gains in the budget. d. increase the flexibility of the discretionary fiscal policy implemented by the federal government. e. require shorter-term economic forecasts that are easy to obtain.
The presence of price controls in a market usually is an indication that
a. an insufficient quantity of a good or service was being produced in that market to meet the public's need. b. the usual forces of supply and demand were not able to establish an equilibrium price in that market. c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers. d. policymakers correctly believed that, in that market, price controls would generate no inequities of their own.