As interest rates fall,
A) the values of bonds rise.
B) the values of bonds fall.
C) the values of bonds are unchanged.
D) the value of perpetuities are unchanged, but the value of other bonds change in value.
E) the value of all bonds except perpetuities change.
A
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Based on the following information, what is the balance on the current account?
Exports of goods and services = $5 billion Imports of goods and services= $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion A) -$2 billion B) $1 billion C) $3 billion D) $4 billion
The Coase theorem suggests that efficient solutions to externalities can be determined through bargaining. Under what circumstances will private bargaining fail to produce a solution?