When the Fed decreases the money supply, interest rates:
a. rise.
b. fall.
c. are unaffected.
d. rise and then fall.
e. fall and then rise.
a
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You expect to rent out a vacation home on Sanibel Island for $800 a month as an investment. Upkeep is estimated at $3,000 a year. If the current market interest rate is 5 percent, you are willing to pay __________ for the house
a. $132,000 b. $100,000 c. $160,000 d. $192,000 e. $800,000
Assume that the central bank purchases government securities in the open market. If the nation has low mobility 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 rises, and current international transactions become more positive (or less negative). b. The quantity of real loanable funds per time period rises, and current international transactions become more negative (or less positive). c. The quantity of real loanable funds per time period and current international transactions remain the same. d. The quantity of real loanable funds per time period rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
An increase in the perceived riskiness of Company A stock ________ the risk premium investors require to purchase Company A stock and ________ the price of Company A stock.
A. decreases; decreases B. increases; decreases C. decreases; increases D. increases; increases
According to the aggregate production function, when inputs increase
A. the economy grows. B. inflation slows. C. GDP declines. D. unemployment rises.