In considering the holding period return, the longer the term of the bond the:
A. less important is the coupon rate and the more important is the current yield.
B. less important is the capital gain.
C. more important is the capital gain.
D. less important is the capital gain and the more important in the current yield.
Answer: C
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If the economy is operating on the relatively vertical segment of the aggregate supply curve, an increase in government spending causes a _____ change in the price level and a _____ change in output.
a) big; big b) big; small c) small; big d) small; small
During the production process Ajax Corporation releases pollution into the air. Ajax Corporation operates in a monopolistic competitive industry. Which of the following statements addresses the pollution situation?
A) Ajax is taking advantage of asymmetric information. B) This is an example of a market failure and is a reason for the government to regulate the industry. C) The quality of the product could be improved if the amount of pollution can be reduced. D) This is known as the lemons problem.