In Figure 4.4, the most likely cause of the increase in the equilibrium interest rate from i1 to i2 is
A) an increase in the price of bonds.
B) a business cycle boom.
C) an increase in the expected inflation rate.
D) a decrease in the expected inflation rate.
C
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Which of the following would result in Company B adding more to its cash at the end of the year than Company A, assuming all else is the same for them.
a) B has a larger proportion of customer sales that become accounts receivable than A b) B may depreciate its equipment faster than A c) B pays more dividends than A d) B has a smaller proportion of customer sales that become accounts receivable than A e) B may depreciate its equipment more slowly than A f) B pays less dividends than A
Suppose you deposit money in a certificate of deposit (CD) at a bank. Which of the following statements is TRUE?
A) The bank is borrowing money from you without a promise to repay that money with interest. B) The bank is lending money to you with a promise to repay that money with interest. C) The bank is technically renting money from you with a promise to repay that money with interest. D) The bank is lending money to you, but not borrowing money from you.