An asset's interest rate risk ________ as the duration of the asset ________
A) increases; decreases
B) decreases; decreases
C) decreases; increases
D) remains constant; increases
B
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The money multiplier is the
A) fraction of the monetary base that is kept in currency. B) number of times that the Fed conducts open market operations in a month. C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money. D) factor by which a change in the deposits base is multiplied to give the change in the monetary base. E) proportion by which a change in the quantity of money changes the monetary base.
Changes in taxes or spending levels that stimulate aggregate demand without the passage of any new laws are called _____
a. expenditure multipliers b. discretionary monetary policies c. discretionary fiscal policies d. automatic stabilizers
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the
a. consumer equilibrium effect. b. price effect. c. income effect. d. substitution effect.
If demand is more elastic than supply, the buyer will pay ________ of a tax.
Fill in the blank(s) with the appropriate word(s).