If the interest rate is 8 percent, a person who is offered the opportunity to buy an annuity paying $30,000 per year forever should
a. do so if the price is greater than $375,000
b. do so if the price is less than $375,000
c. be willing to pay only $37,037 for it
d. be willing to pay $77,037 for it
e. be willing to pay no more than $300,000 for it
B
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In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market sale ________ the supply of reserves causing the federal funds rate to ________, everything else held constant
A) decreases; decrease B) increases; decrease C) increases; increase D) decreases; increase
Everything else held constant, an autonomous tightening of monetary policy will cause
A) the quantity of aggregate demand to increase. B) the quantity of aggregate demand to decrease. C) aggregate demand to increase. D) aggregate demand to decrease.