Suppose the Interest Rate on a Bond Is 12

question 16

Multiple Choice

Suppose the interest rate on a bond is 12.5 percent and that bond pays $90 a year in interest and sells for $720.If the supply of bonds increases and the price of the bond falls to $600, the interest rate will ____ to ____.

• A)increase;15 percent
• B)increase;17.5 percent
• C)decrease;7.5 percent
• D)decrease;10 percent
• E)increase;13 percent

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Definitions:

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex behaviors such as planning, decision making, and moderating social behavior.

Hypothalamus Axons

Axons originating from the hypothalamus, involved in functions like temperature regulation, hunger, and emotional responses.

Postsynaptic Membrane

The membrane of the neuron that receives and responds to neurotransmitters from another neuron at a synapse.

Peptides

Chains of amino acids that are shorter than proteins, which play key roles in biological functions and act as neurotransmitters, hormones, and catalysts.