An Increase in the Market Rate of Return on an Outstanding

question 62

Multiple Choice

An increase in the market rate of return on an outstanding bond will

• A) increase the coupon rate.
• B) decrease the coupon rate.
• C) increase the bond price.
• D) decrease the bond price.

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Definitions:

Keynesian Economists

Economists who believe in the economic theories of John Maynard Keynes, emphasizing the role of government intervention in the economy.

Private Sector

The private sector encompasses businesses and activities not owned or directly managed by the government.

Supply-Side Economists

Economists who believe that reducing taxes and decreasing regulation will stimulate economic growth by encouraging investment, production, and employment.

Marginal Tax Rates

The rate at which the next dollar of taxable income will be taxed, reflecting the percentage of additional income that is paid in tax.