A bond with no expiration has an original price of $10,000 and a fixed annual interest payment of $1000. If the price of this bond increases by $2500, the interest rate in effect will:
A. Decrease by 1 percentage point
B. Decrease by 2 percentage points
C. Increase by 1 percentage point
D. Increase by 2 percentage points
B. Decrease by 2 percentage points
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Economies of scale refer to the range of output over which
A) marginal cost exceeds average cost. B) the long-run average cost falls as output increases. C) the marginal product of labor diminishes. D) the long-run average cost is less than the short-run average total cost.
If the price level is fixed, then an increase in government spending will lead to
A) a larger increase in nominal GDP than in real GDP. B) a smaller increase in nominal GDP than in real GDP. C) no increase in either nominal GDP or real GDP. D) an increase in nominal GDP by the same amount as an increase in real GDP.
Refer to the graph shown. The welfare cost of monopoly is given by:
A. area A. B. area B. C. areas A and B. D. areas C and D.
Which of the following is not an obstacle to development?
A. Overpopulation B. Excessive investment C. Political instability D. Corruption