You buy a bond for $1,000 from the federal government, which guarantees that you will receive $70 a year forever. Thus, 7 percent was the market rate of interest when you bought the bond. Suppose that immediately after you buy the bond, the market rate of interest goes to 10 percent. The market value of your bond
a. could be more or less than $1,000
b. will be less than $1,000
c. will be more than $1,000
d. will remain unchanged
e. will be $1,000
B
Economics
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Which of the following is TRUE for a firm in the long run?
A) Variable costs will initially increase and then decrease. B) The law of diminishing marginal product holds. C) All costs are variable costs. D) Variable costs will equal marginal cost at all output levels.
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What two growth rates comprise of the growth rate of potential GDP?
A. Capital gains and investment B. Money and prices C. Labor input and hours worked D. Government spending and net exports
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