The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price of the bond then falls by $100, what will be the interest rate yield to a new buyer of the bond?
A. 17.8 percent
B. 16.7 percent
C. 15 percent
D. 11.2 percent
B. 16.7 percent
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Economists of the rational expectations school: a. have no confidence in the ability of workers and firms to observe and react to economic events
b. believe workers and firms behave the same regardless of what the Fed does. c. have great faith in the ability of monetary policy makers to maintain a full employment economy with stable prices. d. believe that effective monetary policy can shift the potential level of output to the right. e. believe workers and firms make decisions based on what they think monetary policy will be in the future.
A perfectly competitive firm cannot affect the market price by raising or reducing its supply of a product
a. True b. False Indicate whether the statement is true or false
If consumers spend _____ of a change in their disposable income, then a tax increase of $100 would lower consumption by $70
a. 35 percent b. 100 percent c. 80 percent d. 70 percent e. 50 percent
At the midpoint of a straight-line demand curve, the price elasticity of demand is:
A. less than one. B. zero. C. greater than one. D. equal to one.