Sam is responsible for ordering office supplies for the firm gets a bonus if the firm stays well-stocked at all times. The bonus implies he is more likely to

As the price level falls

a. people will want to buy more bonds, so the interest rate rises. b. people will want to buy fewer bonds, so the interest rate falls. c. people will want to buy more bonds, so the interest rate falls. d. people will want to buy fewer bonds, so the interest rate rises.

Arbitrage is the process by which investors simultaneously sell:

A. assets with higher rates of return and buy otherwise identical assets with lower rates of return. B. assets with lower rates of return and buy otherwise identical assets with higher rates of return. C. riskier assets and buy less risky assets. D. less risky assets and buy riskier assets.