An increase in the confidence that equipment-buying firms have in their future profitability will
A. increase the demand for borrowable money.
B. increase the supply of borrowable money.
C. decrease the demand for borrowable money.
D. decrease the supply of borrowable money.
Answer: A
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Identify the correct statement
a. It is absolutely compulsory for the government to earn a profitable return on the money it earns by selling bonds. b. When government borrowing rises, interest rates decline, thereby driving up private investment. c. When interest rates rise, fewer number of corporations offer new bonds to raise investment funds. d. An increase in interest rate reduces the cost of borrowing by the firms. e. When interest rates fall, the firm's cost of raising funds through bonds increases.
As of December, 2012, the privately held portion of the national debt was approximately
a. 5 percent of the total. b. 20 percent of the total. c. 60 percent of the total. d. 80 percent of the total.
Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply:
a. decreases $500,000. b. increases $500,000. c. increases $600,000. d. increases $100,000.
Price and total revenue are inversely related when demand is
A. price elastic. B. price inelastic. C. perfectly price inelastic. D. unit price elastic.