If the Fed conducted an open market sale of bonds, what would most likely happen in the bond market?
a. The excess demand for bonds would cause the price of bonds to fall.
b. The excess supply of bonds could cause the price of bonds to rise.
c. There would be no effect in the bond market.
d. The excess supply of bonds would cause the price of bonds to fall.
e. The excess demand for bonds would cause the price of bonds to rise.
D
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In the above figure, the shift from point C to point B might be the result of
A) an increase in the price level. B) a decrease in the price level. C) a decrease in government expenditures. D) an increase in the quantity of money.
Which of the following is an example of a normative statement?
a. If the money supply falls, interest rates will rise. b. Teenage unemployment would be lower if there were no minimum wage. c. The quantity of shirts sold increases as the price of shirts decreases. d. The federal government's total spending should be reduced. e. If interest rates go up, then construction activity will fall.