If an investor thinks interest rates are likely to rise, she would:
A. sell her bonds and hold more money.
B. buy more bonds now and hold less money.
C. not change her money holdings at all.
D. not alter her bond portfolio until interest rates actually rise.
Answer: A
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Consider a diagram in which the variable measured on the y-axis remains constant while the variable measured on the x-axis increases. The graph of these two variables is
A) a line that has positive slope. B) non-existent because the two variables are not related. C) a horizontal line. D) a vertical line. E) a line that has a negative slope.
Assume for Brazil that the opportunity cost of each cashew is 100 peanuts. Which of these pairs of points could be on Brazil's production possibilities frontier?
a. (200 cashews, 30,000 peanuts) and (150 cashews, 35,000 peanuts) b. (200 cashews, 40,000 peanuts) and (150 cashews, 30,000 peanuts) c. (300 cashews, 60,000 peanut) and (200 cashews, 50,000 peanuts) d. (300 cashews, 60,000 peanuts) and (200 cashews, 80,000 peanuts)