The supply of bonds rises, ceteris paribus, and the price of bonds __________. This __________ the interest rate and __________ the quantity demanded of money
A) rises; raises; lowers
B) falls; lowers; raises
C) rises; lowers; lowers
D) falls; raises; lowers
E) falls; lowers; lowers
D
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Which best describes a credit default swap?
A) It is designed to reduce interest-rate risk. B) The issuer receives payments from the buyer in return for agreeing to make payments to the buyer if the security goes into default. C) Issuers are taking out insurance in case of default. D) It represents a way for the issuer to establish its creditworthiness.
When a single candidate is chosen by majority vote in a democracy, the political systems _____
a. tend to become corrupted b. tend to be two-party systems c. tend to be one-party systems d. tend to be three-party systems
Suppose the U.S. supply of loanable funds shifts left. This will
a. increase U.S. net capital outflow and increase the quantity of loanable funds demanded. b. increase U.S. net capital outflow and decrease the quantity of loanable funds demanded. c. decrease U.S. net capital outflow and increase the quantity of loanable funds demanded. d. decrease U.S. net capital outflow and decrease the quantity of loanable funds demanded.
Which statement best describes who benefits from basis strengthening over a hedge with a futures contract?
A. Buyers gain, sellers lose B. Buyers lose, sellers gain C. Both gain D. Neither gains or loses since they have offset their basis risk by hedging