To cause the interest rate to fall, the Fed can
a. decrease the money supply
b. stabilize the money supply to increase investor confidence
c. decrease the price of bonds
d. increase the money supply
e. increase the demand for money
D
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Which of the following situations is clearly and unambiguously descriptive of a positive externality?
A. Jack feels better after his daily walk. B. Joriel studies harder than anyone in his class. C. Professor Gomez gave an unannounced quiz to her history class yesterday. D. The President of the United States yesterday signed a legislative act that is very popular in the country. E. none of the above
An indication that Insurance companies anticipate adverse selection is
a. they do not require a deductible b. they do not classify clients into different risk types according to their claim history c. they classify clients into different risk types according to pre-existing conditions d. they do not require a co-payment
According to James Duesenberry
a. relative income is unimportant b. the MPC decreases as national income increases c. Keynes's absolute income hypothesis is correct but his investment hypothesis is not confirmed by the data d. the consumption function slopes downward e. consumption spending is rooted in status
If a market is narrowly defined, a product is likely to have fewer substitutes and demand for the product will be less elastic
a. True b. False Indicate whether the statement is true or false