-In the Above Figure, If the Interest Rate Is 8

question 574

Multiple Choice

-In the above figure, if the interest rate is 8 percent,

• A) people sell bonds so as to convert them into money.
• B) the Fed increases the quantity of money.
• C) people buy bonds and the interest rate falls.
• D) people buy stocks, because stocks are more liquid than currency.

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Definitions:

Tea Act

A 1773 act by the British Parliament granting the East India Company the right to sell tea to the American colonies free of the taxes that colonial tea sellers had to pay, leading to the Boston Tea Party.

Boston Tea Party

A protest by American colonists in 1773 against British taxation, in which they boarded British ships and dumped tea into Boston Harbor.

Patriot Behavior

The actions and attitudes of individuals who intensely support and defend their country, often associated with the American Revolutionaries who fought for independence from Britain.

Continental Association

An agreement adopted by the First Continental Congress in 1774 in response to the British Coercive Acts, implementing a trade boycott with Great Britain.