If the interest rate on a bond is above the equilibrium interest rate, there is an excess ________ for bonds and the bond price will ________
A) demand; rise
B) demand; fall
C) supply; rise
D) supply; fall
A
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Any action, other than lowering its price, that a firm undertakes to increase the demand for its output is called
a. limit pricing b. price enhancement c. illicit competition d. nonprice competition e. price intensive competition
Which of the following is an example of a regulatory action?
a. Drivers who exceed the speed limit will pay a fine if caught. b. Automobile manufacturers are required to include built-in infant seats. c. Two firms receive $100,000 fines for engaging in a price-fixing agreement. d. A junk mail solicitor is taken to jail for mail fraud. e. The tobacco industry is required to pay for the hospital bills of a lifelong smoker who develops cancer.
The money multiplier equals
a. 1/R, where R represents the quantity of reserves in the economy. b. 1/R, where R represents the reserve ratio for all banks in the economy. c. 1/(1+R), where R represents the quantity of reserves in the economy. d. 1/(1+R), where R represents the reserve ratio for all banks in the economy.
If the borrower and lender agree to a loan at 8 percent when the inflation rate is 3 percent, then 8 percent is the ________ interest rate and 5 percent is the ________ interest rate.
A. real; relative B. nominal; real C. relative; nominal D. real; nominal