The Unintended Consequences of an Economic Change That Are Not

question 34

Multiple Choice

The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as

• A) opportunity costs.
• B) marginal effects.
• C) secondary effects.
• D) scarcity constraints.

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Definitions:

Conversion Price

The predetermined price at which convertible securities can be exchanged for common stock.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuing company's shares at certain times during its life, usually at the discretion of the bondholder.

Par Value

The face value of a bond or a stock, as stated by the issuing company.

Strike Price

The predetermined price at which an option can be exercised.