Match Each Description Below to the Appropriate Term (A-G)

question 104

Multiple Choice

Match each description below to the appropriate term (a-g) .
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-The face amount of each bond

• A)Contract rate
• B)Effective rate
• C)Bond discount
• D)Bond premium
• E)Bond
• F)Bond indenture
• G)Principal

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Definitions:

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the actual price they pay.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable due to market distortions like taxes or subsidies.

Producer Surplus

The difference between the amount producers are willing to sell a good for and the actual amount they receive.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices.