Which of the following is the correct way to describe equilibrium in a market?
A) At equilibrium, demand equals supply.
B) At equilibrium, quantity demanded equals quantity supplied.
C) At equilibrium, market forces no longer apply.
D) At equilibrium, scarcity is eliminated.
Answer: B
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Generally with bond ratings, the ________ the rating, the higher the interest rate an investor will receive and the ________ the risk that the issuer of the bond will default
A) lower; higher B) higher; higher C) higher; lower D) lower; lower
Suppose a supplier has an agreement with a firm to be paid $3,500 in 2 years. If the annual interest rate is 4 percent, the supplier would be indifferent between receiving ________ now and waiting 2 years to receive the $3,500.
A) $3,233.46 B) $3,235.95 C) $3,450.45 D) $3,451.32
The net worth of a bank
a. determines the level of bank loans possible. b. is determined by subtracting liabilities from assets. c. is determined by subtracting assets from liabilities. d. can never be a negative value.
The discount rate is the interest ________.
A. rate at which commercial banks lend to the public B. rate at which the central banks lend to the U.S. Treasury C. rate at which the Federal Reserve Banks lend to commercial banks D. yield on long-term government bonds