The Argument That Society Should Be in Favor of Changes

question 24

Multiple Choice

The argument that society should be in favor of changes that benefit some people without making others worse off is known as

• A)a positive externality.
• B)the Coase Theorem.
• C)the cost-benefit principle.
• D)the Pareto principle.

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Definitions:

Interest Rates

The cost of borrowing money or the payment received for deposit funds, typically expressed as a percentage rate over the period of one year.

Bond's Price

The price of a bond is the present value of its expected future cash flows, such as interest payments and the return of principal at maturity.

Interest Rate Price Risk

The risk that the value of an investment will decrease due to a change in interest rates.

Zero Coupon Bond

A type of bond that does not pay interest during its life but is sold at a deep discount from its face value.