Suppose That at a Given Interest Rate and Money Supply,all

question 83

Multiple Choice

Suppose that at a given interest rate and money supply,all firms and households simultaneously try to add to their money balances.They do this by trying to ________,which causes an excess ________,which causes a(n) ________,and finally a(n) ________ in the interest rate.

• A)sell bonds; supply of bonds; increase in the price of bonds; decrease
• B)buy bonds; supply of bonds; decrease in the price of bonds; increase
• C)sell bonds; demand for bonds; increase in the price of bonds; decrease
• D)buy bonds; demand for bonds; increase in the price of bonds; decrease
• E)sell bonds; supply of bonds; decrease in the price of bonds; increase

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Definitions:

Mortgage Payable

A liability representing money owed on a long-term loan used to purchase property, typically secured by the property itself.

Financing Activities

Transactions related to raising capital and repaying shareholders, including issuing equity, obtaining loans, and paying dividends.

Investing Activities

Transactions that involve the purchase or sale of long-term assets and investments are considered investing activities.

Non-current Assets

Non-current assets are long-term resources owned by a company, expected to provide economic benefits beyond one year, such as property, plant, and equipment (PP&E), and intangible assets.