Which of the following is a characteristic of a bond?
A) A bond represents a promise to repay a fixed amount of funds.
B) The face value or principal plus interest is repaid at a specified period of time.
C) The length of coupon payments is fixed by the stated maturity period.
D) All of these are characteristics of bonds.
Answer: D
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If the home nation allows free trade but imposes a tariff on a product currently produced by a home firm monopoly, what is the outcome?
a. The home firm then will regain its monopoly control over the price. b. The home firm will be able to charge a higher price (world price + tariff), but it will become a price taker, just like a competitive firm. c. The home nation's firm will be able to limit quantity and charge a higher price. d. The monopoly firm will lower price, increase sales, and undercut the foreign competition.
The Federal Reserve's policy reaction function provides information about:
A. economywide money demand and the output gap. B. economywide money demand and the long-run target for inflation. C. the short-run target for inflation and how aggressively target will be pursued. D. the long-run target for inflation and how aggressively targets will be pursued.