Which of the following is true regarding bonds?
a. Other things equal, bondholders have greater financial security than stockholders.
b. The possibility of a bond's value increasing greatly is limited compared to stocks.
c. The legal obligation to bondholders is of higher priority than that of stockholders.
d. Higher market interest rates represent a risk to bondholders
e. all of the above
e
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The prisoners’ dilemma is a famous game that demonstrates the basic problem confronting ______.
a. colluding oligopolists b. cartels c. non-colluding oligopolists d. perfect competitors
One of the goals of monetary policy is to make sure that the inflation rate and the overall rate of growth in the economy are the same.
Answer the following statement true (T) or false (F)
When imports exceed exports there is a(n):
A. trade balance. B. trade deficit. C. trade surplus. D. output gap.