If a bond was to pay off one year from now for $321 and the interest rate is 7 percent, what is the price of the bond?

If the real interest rate were -7%, this is:

a. A clear sign that it is better to borrow than to lend. b. Not clear sign that it is better to borrow than to lend because this decision depends on expected inflation. c. Actually, it is impossible for the real interest rate to be -7% because the real interest rate can approach zero, but it can never be less than zero. d. A clear sign that it is better to lend than to borrow.

If the money multiplier is 3 and the Fed buys $50,000 worth of bonds, what happens to the money supply?

a. it increases by $100,000 b. it increases by $150,000 c. it decreases by $100,000 d. it decreases by $200,000