A recent purchaser of a bond that agrees to pay an annual nominal amount would hope that interest rates do not rise
Indicate whether the statement is true or false
True , for two reasons. First, the person is locked into a lower interest rate. Second, if the person needs to sell the bond, he will incur a loss since at higher inteest rates, bond prices fall.
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The supply of high-powered money is $100,000 and the money supply is $500,000. If every individual wishes to hold 5% of his or her deposits in the form of cash, then the bank reserve-holding ratio must be
A) 0.25 if banks have made all loans acceptable by the Federal Reserve requirements. B) 0.20 if banks have not made all loans acceptable by the Federal Reserve requirements. C) 0.17 if banks have not made all loans acceptable by the Federal Reserve requirements. D) 0.16 for any of the legally required reserve amount.
The balance of payments is an accounting statement that shows, between one nation and the rest of the world, the
a. total values of goods, services, and payments flows. b. value of payments flows only. c. value of goods and services flows only. d. value of international investments flows only.
What are the reasons that are usually given to justify regulation?
A decrease in the money supply aimed at decreasing aggregate output is
A) an expansionary fiscal policy. B) a contractionary monetary policy. C) a contractionary fiscal policy. D) an expansionary monetary policy.