The money supply would tend to rise if:
a. banks decide to keep more excess reserves and people convert more of their demand deposits to currency.
b. banks decide to keep more excess reserves and people deposit currency in their demand deposit accounts.
c. banks decide to keep fewer excess reserves and people deposit currency in their demand deposit accounts.
d. banks decide to keep fewer excess reserves and people convert more of their demand deposits to currency.
c
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Refer to the given information. If the price of this bond falls by $200, the interest rate will:
Answer the question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10 percent. A. rise by 2.5 percentage points. B. rise by 5 percentage points. C. fall by 2.5 percentage points. D. fall by 5 percentage points.
Transfer payments are payments that are:
A. made to firms in order to transfer goods and services to the government. B. payments made to households that can then be spent by the households. C. made in market transactions in order to get the seller to transfer the goods or services to the buyer. D. made in order to obtain public goods or services.