A. A bond tends to pay a high interest rate if it is

a. a short-term bond rather than a long-term bond.

b. a municipal bond exempt from federal taxation.

c. issued by the federal government rather than a corporation.

d. issued by a corporation of dubious credit quality.

B. T he main advantage of mutual funds is that they provide

a. a return insured by the government.

b. an easy way to hold a diversified portfolio.

c. an asset that is widely used as the medium of exchange.

d. a way to avoid fluctuations in stock and bond prices.

C. I f the government collects more in tax revenue than it spends, and households consume more than they get in after-tax income, then

a. private saving and public saving are both positive.

b. private saving and public saving are both negative.

c. private saving is positive, but public saving is negative.

d. private saving is negative, but public saving is

positive.