If a corporate bond with a face value of $5,000 pays yearly coupon payments of $100,
what is the coupon rate?
A) 2%
B) 5%
C) 10%
D) 20%
An advantage of the establishment survey over the household survey of the labor
market is that the establishment survey
A) is based on actual payrolls, rather than on unverified answers.
B) includes the number of self-employed persons.
C) includes persons employed at newly opened firms.
D) provides an estimate of the number of persons unemployed.
The U.S. economy has seen a faster increase in productivity since the mid-1990s as
compared to the economies of many Western European countries. Which of the
following explains this?
A) U.S. unions impose stricter work rules as compared to unions in Western European
countries.
B) U.S. government regulations impose stricter work rules as compared to government
regulations in Western Europe.
C) The United States has a higher rate of job mobility than do many Western European
countries.
D) U.S. workers can obtain unemployment insurance for a longer period of time as
compared to workers in most Western European countries.
Economics promotes which of the following as the way to make the best decision?
A) Continue an enjoyable activity as long as you do not have to pay for it.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to pursue it.
D) Continue an enjoyable activity up to the point where its marginal benefit equals its
marginal cost.
If real GDP exceeded potential real GDP and inflation was increasing, which of the
following would be an appropriate fiscal policy?
A) a decrease in the money supply and an increase in the interest rate
B) an increase in government spending
C) an increase in taxes
D) an increase in oil prices
Which of the following is a function that money serves?
A) medium of exchange
B) unit of account
C) store of value
D) All of the above are correct.
Figure 18-1
Refer to Figure 18-1. The appreciation of the dollar is represented as a movement from
A) B to A.
B) D to C.
C) C to B.
D) C to A.
The larger the fraction of an investment financed by borrowing,
A) the greater the potential return and potential loss on that investment.
B) the smaller the potential return and potential loss on that investment.
C) the greater the potential return and the smaller the potential loss on that investment.
D) the smaller the potential return and the greater the potential loss on that investment.
If Abercrombie & Fitch borrows $8 million from a bank to finance the construction of a
new store, this is an example of
A) a stock market transaction.
B) direct finance.
C) a bond market transaction.
D) indirect finance.
Figure 4-2
Refer to Figure 4-2. What area represents producer surplus at a price of P1?
A) C
B) A + C
C) C + E
D) A + C + E