To Prevent Demand- Pull Inflation

question 1

Multiple Choice

To prevent demand- pull inflation

• A) real GDP must increase.
• B) the natural unemployment rate must increase.
• C) firms must refuse to increase wages.
• D) the Fed must not let the quantity of money persistently rise.

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Definitions:

Compound Yield

The rate of return on an investment or loan, considering the effect of compounding interest.

Coupon Bond

A debt security that pays the investor periodic interest payments called coupons and returns the principal at the end of the maturity.

Par Value

Par Value is the face value of a bond or stock as stated by the issuer, which might not reflect its market value.

Yield To Maturity

The total return expected on a bond if held till its maturity date, including both interest payments and capital gains or losses.