If there is an excess supply of bonds at a given price of bonds, then
A) the interest rate will fall.
B) the interest rate will rise.
C) the price of bonds will fall.
D) the interest rate may rise or the interest rate may fall depending upon the reasons for the excess demand for bonds.
B
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The tax increases necessary to fund future Social Security and Medicare benefit payments would be
A) small, but could discourage work effort, entrepreneurship, and investment, thereby slowing economic growth. B) large, but would have little effect on economic growth. C) large, and could discourage work effort, entrepreneurship, and investment, thereby slowing economic growth. D) small, and have little effect on economic growth.
The large number of banks in the United States is an indication of
A) vigorous competition within the banking industry. B) lack of competition within the banking industry. C) only efficient banks operating within the United States. D) consumer preference for local banks.