Which of the Following Is True?​

question 102

Multiple Choice

Which of the following is true?​

• A)​Once the equilibrium price and output is reached, all the mutually beneficial trade opportunities between suppliers and demanders will have taken place, and the sum of consumer and producer surplus is maximized.
• B)​The deadweight loss of a tax is the difference between the lost consumer and producer surplus and the tax revenue generated.
• C)​Those goods that are heavily taxed often have a relatively inelastic demand curve in the short run, so that the burden falls mainly on the buyer, and the deadweight loss to society is smaller than if the demand curve was more elastic.
• D)​All of the above are true.

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Definitions:

Par Values

The nominal or face value of a stock or bond as stated by the issuer, fundamental in understanding stock issuance and bond pricing.

Yield To Maturity

The total return expected on a bond if held until it matures, considering all interest payments made over the life of the bond and its redemption value.

4-Year Bond

A debt security that matures in four years from the issuance date.

Forward Rate

An interest rate agreed today for a loan to be made or a bond to be purchased at a future date.