Which of the following would lead to an increase in bond supply?
A. An increase in corporate taxes.
B. A decrease in expected inflation.
C. An improvement in general business conditions.
D. A decrease in government spending relative to revenue.
Answer: C
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Refer to Table 2-11. If the two countries specialize and trade, who should export digital cameras?
A) South Korea B) China C) There is no basis for trade between the two countries. D) They should both be importing digital cameras.
One way to make consumers take a positive externality into account in their demand decision is to:
A. place a tax on the item. B. tax the producers of the item. C. subsidize the purchase of the item. D. None of these statements is true.
Bank lending and deposits tend to change as interest rates change. Can the Fed counteract this tendency?
A. Yes, through its ability to affect the money supply. B. Yes, through its ability to change tax levels. C. No, the Fed is forbidden by the Constitution from intervening in the economy. D. No, the Fed almost always follows a passive monetary policy.
As nominal Gross Domestic Product (GDP) decreases, people hold
A. less money since they will make fewer purchases. B. more money because they will want to increase the amount of savings. C. about the same amount of money since that has been enough in the past. D. less money because they will want to collect interest.