The risk premium of corporate bonds typically increases
A) when the average price of corporate bonds increase.
B) during a recession.
C) when the interest rates on corporate bonds decreases.
D) when the risk premium on treasury bonds increases.
B
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In the above figure, if a subsidy is granted to producers that generates an efficient allocation of resources, then producers will receive a total amount (price plus subsidy) equal to
A) $20 per unit. B) $15 per unit. C) $10 per unit. D) $5 per unit.
According to Schumpeter, why don't competitive firms innovate?
The law of diminishing returns means that
a. total output will increase, but at a diminishing rate b. marginal product will increase, but at a diminishing rate c. total cost will increase, but at a diminishing rate d. total revenue will increase, but at an increasing rate e. total output will decrease
If the interest rate is 7 percent, what is the present value of $100 received two years from now
a. $107 b. $114.49 c. $87.34 d. $93.45