If the Fed acts to decrease the money supply,
A) it will increase the supply of bonds, drive bond prices up, and drive interest rates down.
B) it will increase the demand for bonds, drive bond prices down, and drive interest rates down.
C) it will increase the supply of bonds, drive bond prices down, and drive interest rates up.
D) it will increase the demand for bonds, drive bond prices up, and drive interest rates down.
Ans: C) it will increase the supply of bonds, drive bond prices down, and drive interest rates up.
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Laws and courts tend to make markets work ________ and make society ________
A) less effectively; poorer B) less effectively; richer C) more effectively; poorer D) more effectively; richer
A deductible reduces ________ in exactly the same way as ________
A) moral hazard; coinsurance B) adverse selection; restrictive provisions C) moral hazard; cancellation of insurance D) adverse selection; limits on the amount of insurance
Legislators are indifferent about placing a unit tax on the suppliers of a good or the demanders. If a tax is placed on the suppliers of the good _____
a. suppliers will pay the entire tax b. suppliers will pay more than if the tax were initially placed on the demanders c. suppliers will pay exactly what they would pay if the tax were initially placed on the demanders d. suppliers will pay less than if the tax were initially placed on the demanders
Screening is the attempt by the uninformed side of the market to uncover the relevant but hidden characteristics of the informed party
a. True b. False