According to the real-balance effect, an increase in the price level will
A) leave total planned real expenditures unchanged since the price level of all goods has increased.
B) decrease total planned real expenditures because of an increase in interest rates.
C) lead to a corresponding increase in total planned real expenditures since businesses are now earning higher profits.
D) decrease total planned real expenditures as a result of a decrease in the real value of money balances.
D
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In financial markets, when a firm issues stock for the first time it is called an
A) investment portfolio option. B) initial public offering. C) initial portfolio offering. D) investment portfolio offering.
When the staff of the account manager at the Fed's Open Market Trading Desk analyzes forecasts on Treasury deposits and information on the timing of future Treasury sales of securities, what agency does it interact with?
A) The Securities and Exchange Commission B) The Treasury's Office of Government Finance C) The Treasury's Office of Federal Reserve Relations D) The Federal Deposit Insurance Corporation