If the Money Price of Wheat Increases and No Other

question 97

Multiple Choice

If the money price of wheat increases and no other prices change, the

• A)relative price of wheat falls.
• B)demand for wheat increases.
• C)opportunity cost of wheat rises.
• D)relative price of wheat is unaffected.

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Definitions:

Coupon

The interest rate on a bond that the issuer promises to pay to the holder until maturity.

Zero-Coupon Bond

A bond that does not pay periodic interest and is sold at a discount from its face value, with the return being the difference between the purchase price and the bond's face value at maturity.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, often indicating the bond's price volatility.

Coupon

The interest rate stated on a bond when issued, which is typically paid at regular intervals until maturity.