If a 10-year Treasury bond pays 3.1 percent and a 10-year corporate bond pays 7.4 percent, what is the interest rate spread on this particular corporate bond?
A. 4.3 percent
B. 7.4 percent
C. 10.5 percent
D. 22.9 percent
Answer: A
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Which of the following fiscal policy actions would be appropriate if the economy is experiencing an recessionary? gap?
A. a decrease in taxes B. an increase in interest rates C. a decrease in government spending D. a decrease in the money supply
Which of the following explains the rise in income inequality in the United States from 1970 to 2011?
a. An increase in minimum wages. b. An increase in the demand for skilled labor. c. An increase in the demand for unskilled labor. d. Reduced international trade with low-wage countries.
Answer the following statement(s) true (T) or false (F)
1. Bonds are considered riskier than stocks. 2. Preferred stockholders are paid before bondholders. 3. Common stock dividends do not vary based on profit. 4. Stockholders are the people who own corporations. 5. It is very difficult for an individual to own stock in a corporation.
the multiplier effect
What will be an ideal response?