A sale of bonds by the Fed generates
A) an increase in the demand for money balances.
B) a decrease in the demand for money balances.
C) an increase in the demand for bonds and a rise in bond prices.
D) an increase in the supply of bonds and a fall in bond prices.
D
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Which of the following is TRUE of the relationship between U.S. trade deficits and federal government budget deficits?
A) Increases in the budget deficit are always associated with reductions in the trade deficit. B) Increases in the budget deficit are always associated with increases in the trade deficit. C) Increases in the budget deficit tend to be associated with increases in the trade deficit. D) Increases in the budget deficit tend to be associated with reductions in the trade deficit.
Refer to Table 2-11. What is China's opportunity cost of producing one pound of wheat?
A) 0.04 units of a digital camera B) 4 digital cameras C) 25 digital cameras D) 40 digital cameras
Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run
Which of the following causes the opportunity cost of holding money in the form of cash to decrease?
A. Higher short-term yields. B. Lower interest rates. C. Higher long-term yields. D. Higher reserve requirement.