A decision by foreign central banks to sell their holdings of U.S. Treasury bonds will
A) lower bond prices and interest rates in the United States.
B) increase bond prices and lower interest rates in the United States.
C) lower bond prices and increase interest rates in the United States.
D) increase bond prices and interest rates in the United States.
C
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A proposition about the relationship between two variables that can be proven false is called:
A) a hypothesis. B) a law. C) a theory. D) the scientific method.
Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent. Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent. In which country are workers better off?
a. Country A because their real wages rise by 18 percent. b. Country A because their real wages rise by 10 percent. c. Country B because the inflation rate is lower. d. Neither country because the increase in real wages is the same.