The Market Prices of Existing Bonds Are

question 278

Multiple Choice

The market prices of existing bonds are

• A) not related to the interest rate.
• B) directly related to the interest rate.
• C) inversely related to the interest rate.
• D) stated in terms of the interest rate.

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Definitions:

Marginal Cost

The boost in complete costs associated with creating one more unit of a product or service.

Private Good

A product that is excludable and rival in consumption, meaning its use is limited to the purchaser and it cannot be shared without diminishing availability to others.

Rivalry

Competition or contention between two or more parties for a goal that only one can attain.

Excludability

A characteristic of a good according to which it is possible to prevent people who have not paid for the good from consuming it.