If an investor has a tax rate on interest income of 25% and the inflation rate is 4%, which bond has the lowest expected real after-tax interest rate?
A. A corporate bond paying 8%
B. A Treasury bond paying 7%
C. A Treasury bond paying 9%
D. A municipal bond paying 6%
Answer: B
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A subsidy
a. used in an abatement equipment market can achieve an efficient solution if the subsidy is set equal to the MEB at QE b. on pollution reduction activity encourages firms to reduce pollution below a predetermined standard c. on abatement equipment can create bias by changing the relative prices of various abatement technologies d. all of the above e. (a) and (b) only
Which of the following will prevent firms from engaging in price discrimination?
A) odd pricing B) transactions costs C) arbitrage D) yield management
The slope of the consumption function is equal to
A) the change in national income divided by the change in consumption. B) the change in disposable income divided by the change in consumption. C) the change in consumption divided by the change in personal income. D) the change in consumption divided by the change in disposable income.
If the required reserve ratio is 5%, what is the value of the simple deposit multiplier?
A) 0.05 B) 0.20 C) 5 D) 20