What is the yield to maturity on a simple loan that requires payment of $500 plus $30 in interest one year from now?
A) 6%
B) 6.38%
C) 5.3%
D) Not enough information has been provided to determine the answer.
A
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Which of the following is a valid effect of monopoly power?
A. Desirable effects on the distribution of wealth B. Efficient resource allocation C. Fostering of innovation D. Obstacle to efficiency
The Laffer curve suggests that if tax rates get too _____, the government's tax revenues will _____.
A. high; fall B. high; rise C. low; fall D. low; rise
The Fed cannot predict the effects of open-market operations with perfect accuracy because of
A. changes in people’s desires for cash. B. foreigners desire to hold U.S. dollars. C. banks’ desires to hold excess reserves. D. all of the above are correct.
An informal understanding about the quality of product components supplied is a key to the relationship between most companies and their suppliers. This is a good example of
A. an adverse selection problem. B. a principal-agent conflict resolution. C. an explicit contract. D. an implicit contract.