If the Fed raises the interest rates on short-term U.S. government bonds, then the Security Market Line shifts:
A. Downward as the risk-free interest rate increases
B. Downward as the risk-free interest rate decreases
C. Upward as the risk-free interest rate increases
D. Upward as the risk-free interest rate decreases
C. Upward as the risk-free interest rate increases
Economics
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The IS curve has a positive slope because a(n) __________ in the interest rate leads to a(n) __________ in desired investment and this leads to a decrease in GDP
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Economics
What characterizes a competitive equilibrium?
A) Markets are rationed. B) Governments stay out of the market. C) Economic agents are price-takers. D) It is costly to experiment with policies.
Economics