If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$50 / (1 + .08)3] + [$500 / (1 + .08)3]", which of the following is correct?
A) The coupon is $50, the interest rate you need is 1.08 percent, and the coupon will mature in 3 years.
B) The face value is $50, the interest rate you need is 8 percent, and the coupon will mature in 3 years.
C) The face value is $500, the coupon is $50, and the coupon will mature in 3 years.
D) The face value is $500, the interest rate you need is 3 percent, and the coupon will mature in 8 years.
C
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Which policy tool allows the Federal Reserve the greatest control over monetary policy?
A) the reserve requirement B) open market operations C) lender of last resort D) the discount rate
A(n) _____ arises when people purchasing a public good have an incentive to let others pay for it and then take advantage of those purchases made by others
a. free rider problem b. monopsony c. monopoly d. adverse selection
What does a balance of trade deficit imply?
a. exports of goods and services exceed imports of goods and services b. imports of goods and services exceed exports of goods and services c. investment income received from abroad exceeds investment income paid to foreigners d. investment income paid to foreigners exceeds investment income received from abroad e. investment by foreigners exceeds domestic investment in other countries
Keeping in mind the Coase theorem, in the figure above, if the residents of the town own the lake, the market does what?
A) overproduces 120 tons of pesticide B) underproduces 120 tons of pesticide C) overproduces 60 tons of pesticide D) produces the efficient quantity of pesticide