After an Extended Period of Steady Inflation at a Constant

question 136

Multiple Choice

After an extended period of steady inflation at a constant rate,

• A) people will anticipate inflation.
• B) actual unemployment will approximate the natural rate of unemployment.
• C) actual unemployment will be less than the natural rate of unemployment.
• D) both a and b are true.

---

Definitions:

Call Protection Provision

A feature of a bond that prohibits the issuer from redeeming the bond before a specified date, protecting bondholders.

Bond Indenture

A legal contract between the bond issuer and the bondholders, detailing the terms of the bond such as interest payments, maturity date, and the issuer's obligations.

Call Features

Options embedded in financial securities that allow the issuer to redeem the security before its maturity date.

Call Premium

The extra amount paid above the bond's face value for calling a bond before its maturity date, compensating the bondholder for early redemption.