If the interest rate were 12.5 percent, how much would people be willing to pay for a stock that was certain to yield a $20 per share stream of net earnings continuously in the future?
a. $20
b. $25
c. $160
d. $250
C
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If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will
A. fall, causing households and businesses to hold more money. B. rise, causing households and businesses to hold more money. C. fall, causing households and businesses to hold less money. D. rise, causing households and businesses to hold less money.
A supply curve shows the relation between the quantity of a good supplied and
A) income. Usually a supply curve has negative slope. B) income. Usually a supply curve has positive slope. C) the price of the good. Usually a supply curve has negative slope. D) the price of the good. Usually a supply curve has positive slope.
The three main methods that governments use to cope with an external cost of production include all of the following EXCEPT
A) taxes. B) mandating clean technology. C) cap-and-trade D) price floors.
The federal funds market is the market where:
A. the federal government raises funds to cover its budget deficit. B. the Federal Reserve System makes loans to commercial banks. C. commercial banks with excess reserves make loans to commercial banks seeking reserves. D. commercial banks make loans to the Federal Reserve.