A production possibilities frontier shows the combinations of various goods that should be produced
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following statements about the term of a bond is correct?
a. Term refers to the various characteristics of a bond, including its interest rate and tax treatment. b. The term of a bond is determined entirely by its credit risk. c. The term of a bond is determined entirely by how much sales charge the buyer of the bond pays when he or she purchases the bond. d. Interest rates on long-term bonds are usually higher than interest rates on short-term bonds.
Government programs aimed at stimulating personal savings:
A. increase welfare if people discount the future too heavily. B. decrease economic efficiency if people have impulse control problems. C. help mitigate regression to the mean in most cases. D. are designed to take advantage of the flaws in the availability heuristic.
How are Treasury bond prices affected when the interest rate falls?
A. The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must decrease. B. The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must increase. C. The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must decrease. D. The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must increase.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.