The Invention of New Technology That Can Double the Amount

question 286

Multiple Choice

The invention of new technology that can double the amount of gold extracted from raw ore will lead to a

• A)higher world price of gold, since mining companies must pay for the new machinery.
• B)lower world price of gold, since any amount of gold output is now cheaper to produce.
• C)higher world price of gold, because miners' wages must double as their productivity doubles.
• D)lower world price of gold, but only if new mining companies are not allowed to enter the industry.

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Definitions:

Yield to Maturity

The complete earnings projected from a bond assuming it is retained up to its expiration date.

Yield to Maturity

The total return anticipated on a bond if it is held until it matures, incorporating all coupon payments and the face value received at maturity.

Coupon Rate

The interest payment per annum on a bond, depicted as a percentage of its face value.