Consider a perpetual bond that pays $200 per year to its owner. By how much would the price of this bond fall if the interest rate rose from 0.04 to 0.05?
A. $1,000
B. $2,000
C. $4,000
D. $500
Answer: A
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Suppose the economy is initially in short-run equilibrium and the Fed decreases the nominal money supply. If the price level remains constant, real GDP will ________ relative to potential GDP and the real interest rate will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Automatic stabilizers drive changes in
a. the total deficit. b. the cyclical deficit. c. the structural deficit. d. monetary policy. e. both b and c.
Federal Reserve open market operations directly influence..
What will be an ideal response?
(Consider This) The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving:
A. monopolization. B. tying contracts. C. price-fixing. D. horizontal mergers.