A policy of maintaining stable interest rates during economic fluctuations will tend to reinforce these fluctuations. A policy of maintaining a constant growth rate in the money supply will tend to cause interest rates to fluctuate, which can cause undesirable fluctuations in investment
Indicate whether the statement is true or false
true
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You have a bond that pays $18 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) The likelihood that the firm issuing your bond will default on debt decreases. B) Coupon payments on newly-issued bonds rise to $22 per year. C) The price of a share of stock in the company rises. D) Coupon payments on newly-issued bonds fall to $15 per year.
Socially inefficient outcomes are possible when
A) uninformed parties want to avoid opportunistic behavior by informed parties. B) informed parties engage in opportunistic behavior against uninformed parties. C) those in charge are risk neutral. D) workers do not own the firm.
Which of the following is not one of the frequently mentioned goals of the Fed?
a. economic growth b. interest rate stability c. financial market stability d. price inflation
Total output may continue to rise even though marginal physical product is negative.
Answer the following statement true (T) or false (F)