An externality refers to economic events outside a market

When interpreting bond prices as present values, discuss what factors determine the price of a two-year discount bond. Include in your answer an explanation of how changes in each of these factors affects the price of a two-year discount bond

What will be an ideal response?

If a positive permanent supply shock were to occur, the resulting equilibrium would be a:

A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.