An increase in the interest rate will
A. increase the price of bonds.
B. decrease the price of bonds.
C. leave the price of bonds unchanged.
D. increase or decrease the price of bonds depending upon whether the money supply has increased or decreased.
Answer: B
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One solution to the "Tragedy of the Commons" is to turn the common resource into a private good
a. True b. False Indicate whether the statement is true or false
The manager of the bank where you work tells you that the bank has $400 million in deposits and $340 million dollars in loans. The Fed then raises the reserve requirement from 5 percent to 10 percent. Assuming everything else stays the same, how much is the bank holding in excess reserves after the increase in the reserve requirement?
a. $0 b. $20 million c. $40 million d. $60 million
Countries that engage in specialization and trade can consume at a level beyond their production possibilities frontier
Indicate whether the statement is true or false
If two goods are close substitutes:
a. A decrease in the price of one will increase the demand for the other b. An increase in the price of one will increase the demand for the other c. An increase in the price of one will decrease the demand for the other d. A decrease in the price of one will have no effect on the demand for the other