Suppose that a bond having no expiration date has a face value of $10,000 and pays a fixed amount of interest of $1000 annually. Compute and enter in the spaces provided either the effective interest rate which a bond buyer could receive at the new price or the bond price (rounded to the nearest $1000) required to receive the interest rate shown.

An example of negative productivity shocks that could cause recessions is

a. a hurricane, which destroys capital. b. a decrease in the price of oil. c. reductions in defense spending. d. all of the above. e. both a and b.

The federal income tax began in the United States with the

a. Morrill Act of 1862. b. addition of the Bill of Rights to the Constitution in 1791. c. passage of the 16th Amendment to the Constitution in 1913. d. New Deal legislation of the 1930s.