Which of the following illustrates the concept of scarcity?
a. There is usually more than one use of your "free" time in the evening.
b. More clean air is wanted than is available in large polluted metropolitan areas such as Los Angeles.
c. There are many competing uses for the annual budget of your city, county, or state.
d. All of the answers are correct.
d
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When the Fed purchased a large quantity of long-term bonds, as it did during 2008-2010 with its quantitative easing policies, but most banks held onto their new reserves, the money multiplier ________ while the monetary base ________
A) increased; increased B) increased; decreased C) decreased; increased D) decreased; decreased
Potential buyers of ABC Corporation bonds are concerned about ABC Corporation declaring bankruptcy. Potential buyers of XYZ Corporation bonds are not concerned that XYZ Corporation may declare bankruptcy. Which of the following statements is correct?
a. Other things equal, the interest rate on XYZ Corporation bonds will be high relative to the interest rate on ABC Corporation bonds. b. An ABC Corporation bond must have a longer term than an XYZ Corporation. c. XYZ Corporation bonds carry less default risk than do ABC Corporation bonds. d. All of the above are correct.