The yield on a bond is that interest rate for which the present value of the interest and principal payments promised by the bond are
a. equal.
b. as large as possible.
c. equal to the price of the bond.
d. equal to the face value of the bond.
c
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If the demand for labor is unchanged, an increase in the supply of labor will lead to
A) a decrease in the quantity of labor demanded and a decrease in the equilibrium wage. B) a decrease in the quantity of labor demanded and an increase in the equilibrium wage. C) an increase in the quantity of labor demanded and an increase in the equilibrium wage. D) an increase in the quantity of labor demanded and a decrease in the equilibrium wage.
Markets can be missing:
A. because a market is taxed. B. when the sale of a particular service is banned. C. when miscommunication of information between buyers and sellers leads to the wrong equilibrium price. D. All of these are true.
Which is a screen against adverse selection
a. Insurance companies require homeowners to have smoke detectors b. Rearview cameras in cars c. Installing engine monitors to track driving habits of the insured d. Prospective secretaries must take a typing test before being hired
If inflation is higher than expected, then lenders receive interest payments whose real values are less than they expected
a. True b. False Indicate whether the statement is true or false