An increase in the price of a particular bond implies an increase in the interest rate for that bond
a. True
b. False
Indicate whether the statement is true or false
False
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The term ceteris paribus means that
a. everything is changing. b. all variables except those specified are constant. c. no one knows which variables will change and which will remain constant. d. the basic postulate of economics does not apply for the case being considered.
Which of the following are explanations for sticky prices?
a. long-term labor contracts b. fixed exchange rates c. flexible exchange rates d. fixed money supply
The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk. B) a reduction in maturity. C) a flight to quality. D) a flight to liquidity.
Answer the following questions true (T) or false (F)
1. Countries without well-developed financial systems are able to sustain high levels of economic growth. 2. In an open economy, the country interacts with other economies through both trading of goods and services and borrowing and lending. 3. If there is public dissaving, investment spending in the economy will decline, holding everything else constant.