Which of the following bonds are considered to be default-risk free?
A) municipal bonds
B) investment-grade bonds
C) U.S. Treasury bonds
D) junk bonds
C
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For most goods and services the income elasticity of demand is
A) negative. B) positive. C) invisible. D) inverse.
Average labor productivity equals:
A. average production per year. B. output per person. C. total output. D. output per employed worker.
If an economy is above potential output and the government opts for a contractionary fiscal policy (running surpluses) to shift the AD curve, an economist with a Classical view, who holds the Ricardian equivalence theorem to be practically true, would conclude that the AD curve:
A. does not shift since the lower government spending is offset by higher private consumption. B. shifts to the left due to lower government spending. C. does not shift since the lower government spending is offset by lower private consumption. D. shifts to the right due to lower government spending.
The Great Depression of the 1930s, with a large number of workers and factories unemployed, would be represented in a production possibilities frontier by
A) a point inside the frontier. B) a point outside the frontier. C) a point on the frontier. D) an intercept on either the vertical or the horizontal axis.