Possible ways for the Fed to increase the money supply include ________ the rediscount rate and ________ reserve requirements
A) lowering, lowering
B) lowering, raising
C) raising, lowering
D) raising, raising
A
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Jeremy purchases a bond that pays $600 in interest. If Jeremy paid $9,000 for the bond, what is the interest rate? If Jeremy paid $10,000 for the bond, what is the interest rate? How did a rise in the price of the bond affect the interest rate?
What will be an ideal response?
A firm has three different investment options, each costing $10 million. Option A will generate $12 million in revenue at the end of one year. Option B will generate $15 million in revenue at the end of two years. Option C will generate $18 million in revenue at the end of three years. Which option should the firm choose?
a. Option A b. Option B c. Option C d. The answer depends on the rate of interest, which is not specified here.