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A One-Period Bond Is a Promise to Repay
A) rr Units of Goods in the Second Period

Question 1

Multiple Choice

A one-period bond is a promise to repay


A) rr units of goods in the second period.
B) the original amount lent.
C) 1(1+r) \frac { 1 } { ( 1 + r ) } units of goods in the second period.
D) (1+r) ( 1 + r ) units of goods in the second period.
E) the real interest rate.

Correct Answer:

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