Suppose the Fed conducts an open market sale of bonds. This monetary policy action will tend to cause
A. the price of bonds to increase and the interest rate to decrease.
B. the price of bonds to decrease and the interest rate to increase.
C. the price of bonds to decrease and the interest rate to decrease.
D. the price of bonds to increase and the interest rate to increase.
Answer: B
You might also like to view...
Explain the concept of purchasing power parity
What will be an ideal response?
Every point on the joint production possibilities frontier represents
A) an initial endowment. B) inefficient production. C) the marginal rate of substitution of goods for each producer. D) at least one producer specializing in production.
Higher saving is associated with
a. a larger capital stock and higher productivity. b. a larger capital stock but not higher productivity. c. higher productivity but not a higher capital stock. d. neither a higher capital stock nor higher productivity.
One way that central banks can maintain their credibility is by ______.
a. hiring an unknown outsider to lead them b. becoming heavily involved in politics c. avoiding disclosing an inflation target d. maintaining independence from other government entities