The coupon rate on newly issued bonds is usually higher for bonds with ________ terms and ________ risk that the borrower will go bankrupt.
A. longer; greater
B. shorter; smaller
C. shorter; greater
D. longer; smaller
Answer: A
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________ is the single biggest factor affecting income distribution in the United States
A) Location of household B) Type of household C) Education D) Age of household
The water and diamonds paradox of value
A) is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive. B) points out that we generally have a low total utility of water and a high total utility of diamonds. C) is resolved by the principle that market price is determined by total utility, not marginal utility. D) none of the above
Because taxes distort incentives, they typically result in
a. deadweight losses. b. reductions in consumer surplus. c. reductions in producer surplus. d. All of the above are correct.
According to the quantity theory of money, deflation will occur if the
A) money supply is less than real GDP. B) money supply is more than real GDP. C) money supply grows at a slower rate than real GDP. D) money supply grows at a faster rate than real GDP.