When relying on credit rating agency ratings to determine whether or not a bond should be purchased, investors should be aware that
I. the SEC requires a rating for debt issues of more than $5 million
II. a bond's credit rating reflects only a single point in time and is subject to change
III. a deterioration in price might actually precede a ratings downgrade
IV. credit ratings are not used by issuers other than corporations
A) I and III
B) I and IV
C) II and III
D) II and IV
Answer: C
Economics
- If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)
- If the current price is above equilibrium price in a competitive market, we should expect a shortage of the product.(True/False)
- Any time the government sets an artificially low price for a product, it increases the possibility of a shortage of that product.(True/False)
- In cost-push inflation, prices go up because of higher cost of production.(True/False)
- When the Federal Reserve lowers the reserve requirement, the amount of money in circulation should tend to decrease.(True/False)
- A study of United States imports and exports shows that most of the United States' negative balance of trade is caused by imports of oil and automobiles.(True/False)
- "Dumping" is selling products to foreign countries for less than the price charged.(True/False)
- U.S. businesses were the first to start the trend toward multinational corporations.(True/False)
- Import quotas are no longer permitted under GATT.(True/False)
- Recession is a lesser form of inflation.(True/False)
- Prices help to determine the opportunity cost of a purchase.(True/False)
- The equilibrium price is where supply and demand curves intersect.(True/False)
- More than half of every sales dollar goes to profits.(True/False)
- Practical economists would order antipollution or clean-up measures only when the gains fro reduces pollution damage exceeded the cost of cleaning up or preventing that amount of pollution.(True/False)
- Higher GNP figures resulting form inflation do not represent an increase in output.(True/False)
- Political freedom and economic freedom are unrelated.(True/False)
- Interest on a bond must be paid whether the issuing corporation makes a profit or not.(True/False)
- A mutual fund is a single investment made and managed by one individual.(True/False)
- According to the Taft-Hartley Act, the president may delay a strike for 80days if it is harmful to the nation's safety and health.(True/False)
- Prices are an ineffective way to deal with scarcity.(True/False)
- The supply curve slopes downward from left to right.(True/False)
- A flexible exchange rate system is a system in which the laws of supply and demand are allowed to set the prices, or exchange rates, among types of money.(True/False)
- Environmental regulation can cause productivity measure to fall(True/False)
- Unlike other major energy sources, the supply of fossil fuels such as petroleum, natural gas, and coal are unlimited (True/False)
- The demand curve for a firm in a competitive environment is_______.