If interest rates are falling, then, ceteris paribus,
A) bond holders are suffering capital losses.
B) bond prices are rising.
C) the liquidity demand for money will be falling.
D) income must be rising.
B
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Suppose a country has a current account surplus and that there is no intervention by finance ministries or central banks. This current account surplus indicates that the country has
A) a deficit in its capital account. B) a surplus in its capital account. C) the official reserve transactions balance is positive. D) the official reserve transactions balance is negative.
Social welfare is
a. a government program through which society takes care of low-income people b. the overall well-being of people in the economy c. measured by spending on party supplies, restaurant meals, and movie tickets d. applies to sociology, not economics e. All the answers are correct.
The ease with which an asset can be converted into the medium of exchange is called
a. liquidity. b. velocity. c. the equation of exchange. d. the money multiplier.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and current international transactions becomes more negative (or less positive). b. The quantity of real loanable funds per time period rises, and current international transactions becomes more positive (or less negative). c. The quantity of real loanable funds per time period rises, and current international transactions remain the same. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The quantity of real loanable funds per time period and current international transactions remain the same.