For example, an increase in the money supply, areal variable, will cause the price level, anominal variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a variable.
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Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31.
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