Which best describes a credit default swap?
A) It is designed to reduce interest-rate risk.
B) The issuer receives payments from the buyer in return for agreeing to make payments to the buyer if the security goes into default.
C) Issuers are taking out insurance in case of default.
D) It represents a way for the issuer to establish its creditworthiness.
B
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Refer to Figure 21-3. Which of the following is consistent with the graph depicted above?
A) Taxes are changed so that real interest income is taxed rather than nominal interest income. B) Technological change increases the profitability of new investment. C) The government runs a budget deficit. D) An expected recession decreases the profitability of new investment. Figure 21-4
Reparations for slavery in the United States would
A) be consistent with the Pareto principle. B) be inconsistent with the Pareto principle. C) have nothing to do with the Pareto principle. D) be unconstitutional.