Dealer Spreads Depend on Several Factors

question 5

True/False

Dealer spreads depend on several factors. For the retail investor, the dealer spread rarely exceeds one-half of one point ($25 per $5,000 of par value).

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Definitions:

Net Taxes

The total taxes paid to the government minus transfer payments and subsidies received from the government.

Aggregate Demand

The total quantity of goods and services demanded across all levels of an economy at a given price level and in a given time period.

Potential Output

The peak level of real GDP that can be maintained in the long run without causing inflation to rise.

Discretionary Fiscal Policy

Government policy involving changes in taxation and spending that are undertaken explicitly to influence economic activity.