Holding all else constant, when interest rates fall,
(a) yields on common stocks rise above yields on bonds.
(b) yields on common stocks fall below yields on bonds.
(c) yields on common stocks and bonds rise at an equal rate.
(d) yields on common stocks and bonds fall at an equal rate.
(a)
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Which of the following is not an example of a final good or service (from the perspective of the national income accounts)?
A. A new string trimmer purchased by Green Grass Lawn Care Services, which employees will use to maintain customer's yards B. Seedlings and saplings purchased for resale by Wendy's Garden Center C. New lawn mowers sold to consumers by Cut-Rite Lawn Equipment & Supplies in their retail store D. Flowers and pots purchased by homeowner Joe Smith for his garden
Explain the differences between using the monetary base versus federal funds rate as the monetary policy instrument. Which does the Fed use as its instrument?
What will be an ideal response?
Which of the following would increase in response to a increase in the price of ironing boards?
a. the quantity of irons demanded at each possible price of irons b. the equilibrium quantity of irons c. the equilibrium price of irons d. None of the above is correct.
Use the following information to answer the next question. Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the accounting profit generated by Extreme Gaming in the first year?
A. $5,000 B. $160,000 C. $780,000 D. $220,000