Answer the following statements true (T) or false (F)
1. A bond with no expiration date is priced at $10,000 when the interest rate in the economy is 6%. If the interest rate falls to 5.5%, then this bond's price would decrease.
2. The price of a bond with no expiration date is $1,000 and the fixed annual interest payment is $100. If the price of the bond falls to $800, the interest rate to a new buyer of the bond is now 20 percent.
3. The reserves of commercial banks are assets to commercial banks and liabilities of the Federal Reserve System.
4. The discount rate is the interest rate at which commercial banks lend to their best corporate customers.
5. The most frequently used instrument of the Federal Reserve System to control the money supply is the required reserve ratio.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
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If a nation's budget deficit rises, domestic private investment can remain unchanged through some combination of ________ private saving and ________ importing relative to exporting
A) increased, less B) increased, more C) decreased, less D) decreased, more
A market with more than one seller and significant barriers to entry is called
a. perfect competition b. monopolistic competition c. an oligopoly d. collusive e. regulated
Which of the following pairs would most likely be confused for each other?
a. causation and hypothesis b. composition and hypothesis c. correlation and composition d. causation and correlation
The World Bank has estimated that private saving changes by how much when government spending increases by $1?
a. Private saving increases by $0.30. b. Private saving decreases by $0.30. c. Private savings increases by $1.00. d. Private savings decrease by $1.00.