Suppose that you are a broker and people tell you the following about themselves. What sort of bond would you recommend to each? Defend your choices
a. "I am in a high federal income tax bracket and I don't want to take very much risk."
b. "I want a high return and I am willing to take a lot of risk to get it."
c. "I want a decent return and I have enough deductions that I don't value tax breaks highly."
a. A municipal bond. Municipal bonds generally have low credit risk and are not subject to federal income tax.
b. A junk bond. Junks bonds have a high return because they have high risk.
c. A corporate bond that isn't a junk bond. Corporate bonds have more risk than government bonds but have no special tax treatment, so they pay moderate rates of return.
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Refer to Figure 4.1. The game described in the payoff matrix has the characteristics of a(n) ________ game
A) prisoner's dilemma B) pure coordination C) battle of the sexes D) assurance
Deflation will
A) increase the quantity of real GDP demanded. B) decrease aggregate demand. C) increase aggregate demand. D) decrease the quantity of real GDP demanded.
A system in which money is issued by the government and its value is based uniquely on the public's faith that the currency represents command over goods and services is the
A) transactions approach. B) liquidity approach. C) fiduciary monetary system. D) transaction deposits.
When more and more doses of fertilizers are added to a fixed plot of agricultural land, the crop yield initially declines but eventually rises
a. True b. False Indicate whether the statement is true or false