Suppose that many corporations begin issuing new bonds. Everything else being equal, what is most likely to happen to the interest rate?
A. It will increase.
B. It will decrease.
C. It will not change.
D. It will vary according to a random walk.
Answer: A
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Which of the following best describes comparative advantage?
A) using the fewest number of resources to produce a given amount of output B) being able to produce more output than any other country C) having the largest number of resources compared to other countries D) forgoing the fewest units of one product to produce a unit of another product E) It is the same as absolute advantage.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher