When the Fed ________ the federal funds rate, other short-term interest rates ________ and the exchange rate ________
A) lowers; rise; rises
B) raises; fall; rises
C) raises; rise; rises
D) raises; rise; falls
E) lowers; rise; falls
C
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Applying neoclassical theory to the housing market, ________ cause a decrease in the user cost of housing
A) higher expected household incomes B) higher rates of household formation C) increases in the expected relative price of housing D) tighter constraints on mortgage financing
Southwest Airlines wants to raise $20 million to finance the renovation of their corporate offices, and the company wishes to raise the funds through direct finance. Which of the following methods could it use?
A) It could issue $20 million in stocks. B) It could sell $20 million in bonds. C) It could borrow $20 million from a bank. D) It could choose either A or B.