What happens when the central bank decides it will sell bonds using open market operations?
a. Interest rates decrease.
b. The money supply increases.
c. The money supply decreases.
d. The money supply is unaffected.
c. The money supply decreases.
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When the percentage change in the quantity demanded equals the percentage change in price, then demand is
A) inelastic. B) unit elastic. C) elastic. D) irrelevant. E) undefined.
Suppose that land and capital are substitute resources. If rent rose, then the employment of capital would be _____ by the substitution effect and _____ by the output effect.
A. increased; increased B. decreased; decreased C. increased; decreased D. decreased; increased
The current account in the BOP records:
A. all money flowing between countries. B. a nation's yearly exports and imports of goods and services. C. only the transactions involving capital goods in international trade. D. only the transactions involving consumer goods in international trade.
Which of the following is an important factor affecting economic growth?
A. the level of prices B. the rate of saving C. exchange rates D. the rate of interest